Energy Finance: the Case for Derivatives Markets

Delphine Lautier and Yves Simon

Chapter 8 in The New Energy Crisis, 2009, pp 231-255 from Palgrave Macmillan

Abstract: Abstract For several years, prices and volumes on energy derivatives markets have been increasing at a tremendous rate. Such sustained growths naturally give rise to questions. Should we worry about such a development? Has it gone too far? Are derivatives markets really characterised by a high leverage effect, by opacity and liquidity problems? Do all these markets and transactions really respond to a need? Should we restrain the transactions of speculators in such markets, before they introduce excess volatility, capable of destabilising the underlying physical markets? This chapter proposes answers to these questions, or at least part of an answer, whenever it is possible. It focuses on derivatives markets,1 and more specifically on energy derivatives markets.

Keywords: Credit Risk; Future Market; Implied Volatility; Future Price; Energy Finance (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-24223-4_9

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DOI: 10.1057/9780230242234_9

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