Auction and continuous block trading at the Spot Market
The new company will offer its participants trading in already existing products and proven trading systems. At the Spot Market the new EEX will offer the auction market as well as the continuous block trading. "The continuous block trading and the auction market supplement each other", Hans Schweickardt, management of EEX, and Dr. Carlhans Uhle, CEO of LPX, said on Friday in Berlin. The auction market is said to be useful for optimising ones purchase and/or sales portfolio with prices in line with the market, and the continuous block trading is said to be mostly suited for the use of price differences. Thus the Sapri system already used in Leipzig and the Frankfurt Xetra system will come into operation in parallel. The hourly auction of the Xetra system will be stopped in the interest of liquidity concentration, the continuous trading of blocks only takes place on Xetra.
Joint Futures Market concept
Both partners intent to implement resp. further develop their mutual concept for the Futures Market on base of the Eurex system; no second Futures Market will be established. Quarter Futures completing the product range at the Futures Market are introduced this quarter. The calculation of the settlement price then takes place on basis of the auction market. It is planned to add further simplified connection alternatives, in order to offer a cost-effective access especially for participants with smaller and middle-sized trading volumes. "This serves the sustainable security of liquidity," Uhle explained.
Advantages for the customers
By concentrating on one exchange the development of power trading in Germany will be further strengthened. In future the trading participants can concentrate their engagement on one German exchange and thereby reduce their expenses for admission, connection and operating when having the same product range and service. „We want to use the synergies which we realise with that merger for establishing new markets and services", Schweickardt said about the perspective. The new company is going to use mutual resources for the further qualification of the Futures Market participants.
The new EEX's legal form will be an incorporated company. Designated members of the board of the new company are Carlhans Uhle and Hans E. Schweickardt. The general meeting of the EEX AG and the partners' meeting of the LPX GmbH shall agree the merger in the middle of December.
LPX Leipzig Power Exchange, Leipzig, has started with the Spot Market on 15 June 2000 as first German power exchange. EEX European Energy Exchange, Frankfurt/Main, has started the Spot Market on 8 August 2000 and the Futures Market for power futures on 1 March 2001. On both Spot Markets around 90,000 MWh are traded per day, corresponding a share of approx. 6.6 per cent of the power sold in Germany.
