BY Stephen Jay, Executive General Manager Operations, Transpower New Zealand Ltd.
ON September 1, 2020
Originally published in APEx Newsletter Volume XV – September 2020
Nodal Exchange is a derivatives exchange providing price, credit and liquidity risk management to participants in the North American commodity markets. All transactions on Nodal Exchange are cleared through its clearing house, Nodal Clear, using a portfolio margining approach that provides participants significant risk management and capital efficiency advantages. Nodal Exchange is a leader in innovation, having introduced the world’s largest set of electric power locational (nodal) futures contracts. Nodal Exchange currently offers over 1,000 contracts on hundreds of unique locations, providing the most effective basis risk management available to market participants. Nodal Exchange also offers natural gas, environmental and trucking freight contracts. Nodal Exchange became part of the EEX Group in 2017; EEX Group is in turn part of the Deutsche Börse Group. EEX
Group is the largest power exchange group in the world.
Nodal Exchange has over 50% market share of all cleared U.S. power futures contracts, measured by open interest, with over 1 billion MWh of open interest. Nodal Exchange’s position is especially strong in the PJM region where it achieved a record 59% share of futures open interest as of June 30, 2020. Nodal Exchange grew traded volume 79% in 2019. This annual growth rate of 79% compares to an industry growth rate of just 8% over that same time period. Nodal Exchange grew its market share of monthly futures trading from 21.5% in 2018 to 35.6% in 2019.
On November 12, 2019, Nodal Exchange and Nasdaq Futures, Inc announced an agreement for Nodal Exchange to acquire NFX’s futures and options exchange business. Nodal then arranged for the NFX marine freight business to be transferred to Nodal’s parent EEX in Europe and this migration was completed in February 2020. The power and natural gas businesses at NFX were migrated to Nodal Clear in February and April 2020, respectively.
Beyond these accomplishments in power, in November of 2018, Nodal Exchange, in cooperation with IncubEx, extended its product offering beyond power and gas for the first time, with the introduction of emissions and environmental products for the North American market. Nodal Exchange currently offers the most environmental futures and options contracts of any exchange in the world. In March of 2019, Nodal Exchange, in cooperation with FreightWaves, launched the world’s first trucking freight futures contracts. In September of 2019, Nodal expanded its natural gas futures offering and added natural gas options for the first time.
To learn more about Nodal Exchange and Nodal Clear, please visit