In order to increase the security of trading, Towarowa Giełda Energii (TGE) introduces additional mechanisms to limit daily price fluctuations, in the form of static and dynamic spreads. These mechanisms have been developed in consultation with both market participants and regulators.
The static spreads set the price range within which market participants can place orders during the session. They apply to all orders placed on the CFIM with respect to electricity and gas instruments, on a given trading day. The static spreads protect against non-market price signals and resulting potential financial losses.
The dynamic spreads limit daily fluctuations of transaction prices in relation to the reference price, which directly translates into the value of clearing prices that are taken into consideration by the Clearing House (IRGiT) in determining the amount of collateral margins.
TGE also plans to introduce a “Fast Market” model aimed at reducing the market risk of participants acting as market makers. It offers possibility of increasing the required spreads of market orders placed by market makers and significantly reduces market risks resulting from price volatility. The “Fast Market” is activated in case of high volatility of transaction prices. The market maker can then trigger an order using the extended spread.
Detailed information on the mechanisms being introduced, i.e. static and dynamic spreads, has been incorporated into the “Trading Terms” applicable to the Commodity Forward Instruments Market operated by TGE for electricity and gas, approved by the TGE’s Management Board. The documents have been published and are available at
https://www.tge.pl/en in the Rules and Regulations section.