PVB-LPI natural gas futures products are contracts indexed to the MIBGAS daily price (LPI or Last Price Index Day Ahead) with the following characteristics:
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Trading
The purchase and sell orders that MIBGAS Derivatives agents send to the trading platform for these products will have a price equal to the spread with respect to the price of the LPI index at which they want to buy or sell gas with delivery in PVB.
This spread is the one traded on screen (on the platform). Thus, purchase and sell orders for a quantity of gas are accompanied by a price spread. For example, when a buyer attacks a sell order with a certain spread, the matched spread of the sell order is added to the Last Price Index (LPI) Day Ahead price on the delivery day for settlement.
Settlement
The LPI-indexed PVB product is settled each delivery day at the LPI Day Ahead price published by MIBGAS for that day, plus the spread traded on the MIBGAS platform.
Risk management advantages
This product allows the complex risk management of the agents to be carried out by simplifying multiple hedging transactions into a single operation. The physical product reproduces identically in terms of settlement the strategy that agents use today to hedge in TTF but referenced to a MIBGAS price index.
To trade the PVB product indexed to LPI it is necessary to be registered in MIGBAS Derivatives and OMIClear.
The registration process in MIBGAS Derivatives is very simple and, as in MIBGAS, Agents can participate in the market directly or through a representative. In the latter case, representatives who are not Agents must register as Representative Entities.