HUDEX introduces new discounts for OTC trades
HUDEX is constantly working on further increasing market liquidity on both its power and natural gas futures markets and providing better services for its partners. Since the majority of Hungarian power futures deals is traded in the form of over-the-counter (OTC) transactions, HUDEX decided to introduce new discount offers from June 1, 2020 for both brokers and traders trading on its market.
According to a recent analysis made by HUDEX, the majority of the Hungarian power futures trades were registered as OTC deals. Conducting OTC transactions on HUDEX indeed has its benefits giving the security to the brokers and their clients of avoiding counterparty risk. HUDEX offers a Straight-Through Processing (STP) mechanism using ECC’s clearing facility, to make sure all deals are guaranteed by the leading central counterparty in Europe. These features bring even greater benefits now in the current pandemic situation when both liquidity problems and counterparty risks increased due to the turmoil caused by COVID-19.
With the objective to increase the ratio of OTC deals via HUDEX ’s clearing facility supported by ECC, HUDEX introduces special discount packages for its members.
In case of registering OTC derivative power transactions on HUDEX for the total amount of at least 200 GWh per month, the Exchange’s member is entitled to a refund of 30% of the total monthly HUDEX transaction fee, which lowers the transaction fee to 0.007 EUR/MWh.
Furthermore, in case if a HUDEX member registers OTC power deals for the minimum of 500 GWh per month, the member is entitled to a refund of 50% of the total monthly HUDEX transaction fee, which means the transaction fee dropping to 0.005 EUR/MWh.
In addition, HUDEX introduces the possibility of conducting profit-sharing agreements, aiming to further strengthen the cooperation with the relevant energy brokers and steer their transactions towards the HUDEX clearing facility.
By implementing the above-mentioned developments, HUDEX will offer the most favorable conditions for OTC registration for Hungarian power futures, meaning the lowest transaction fees combined with the reliable guarantee function of ECC. HUDEX expects a significant increase in the OTC volumes in parallel with the growth of on-screen trading liquidity.