Each strip is made up of four consecutive electricity contract months in a particular region, traded at an average price. Strips are available for:
- financial years, with September, December, March and June contracts
- calendar years, with March, June, September and December contracts
Electricity strips have their own defined market window in ASX Trade24. Each market is identified by the last contract month in the defined market window, where:
- M indicates June, showing the strip covers a financial year
- Z indicates December, showing the strip covers a calendar year.
For example:
- HNZ0 = BNH0+BNM0+BNU0+BNZ0
- DNM1 = PNU0+PNZ0+PNH1+PNM1
Pricing
The price of each strip in the defined market window is the MWH-weighted average price of the quarterly futures contracts in the strip:
Annual strip price =
- (Q1 price x Q1 contract size + Q2 price x Q2 contract size +
- Q3 price x Q3 contract size + Q4 price x Q4 contract size) /
- Q1 contract size + Q2 contract size + Q3 contract size + Q4 contract size
Where the contact size relates is the MWH exposure of the relevant contract.
