In November 2015 the Polish Power Exchange (POLPX) extended its offer by launching the Financial Instruments Market (FIM). From now on, not only commodities on the physical market but also financial instruments on the FIM can be traded on POLPX. The initial offer of the FIM is based on electricity prices.
The FIM makes it possible to trade in standardised contracts (electricity futures) on the price of future electricity deliveries. It provides a platform for hedging against price risk without a need for taking a position on the physical market. The FIM is designed for a wide variety of market participants including electricity producers, trading companies and customers.
The instruments currently traded on the FIM include two series of yearly contracts for the next two years, four series of quarterly contracts for the next four quarters and four series of monthly contracts for the next four months. The minimum transaction unit is 1 MWh and the minimum quotation increment is 0.01 PLN/MWh. The transactions made on the FIM are settled by the Warsaw Commodity Clearing House.
POLPX is convinced that the FIM will attract new market participants. The possibility of financial settlements without physical deliveries could make the FIM particularly attractive to investors in the financial sector. POLPX intends to develop its new market in stages. After reaching a certain level of liquidity on the FIM, POLPX intends to introduce derivatives based on gas prices.