ICE UK Natural Gas

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The ICE UK Natural Gas Futures contract, first listed in January of 1997, is used primarily to manage price risk in the underlying physical natural gas market, as an investment vehicle, to effect physical delivery into the UK gas grid, and to enable users to separate/reference the price element within a long-term physical gas contract.

The contract results in physical delivery only if position(s) are not closed out prior to expiration. Physical delivery takes place within the UK natural gas grid at the National Balancing Point (NBP). Delivery must be made equally throughout the delivery period and equivalent to the number of lots open at the time of expiration.

The ICE UK Natural Gas Options contract is an option on the ICE UK Natural Gas Futures contract. At expiry, one lot of UK Natural Gas Options will exercise into one lot of UK Natural Gas Futures. UK Natural Gas Options are European-style, such that In-The-Money options, unless abandoned, are automatically exercised at expiry. At-The-Money and Out-of-The-Money options will expire un-exercised unless the Member has elected to exercise them.

Uses

Natural gas is a fossil fuel source of energy. Due to economical and ecological advantages that it presents as well as its safety qualities (e.g. reduced flammable range), natural gas is an increasingly attractive source of energy in many countries.[1]

Data Quotes

ICE offers data quotes on a subscription basis.[2]

Contract Specs

UK Natural Gas Future
Trading Screen Product Name UK Natural Gas Futures
Trading Screen Hub Name NBP
Trading Period 78-83 consecutive month contracts.

11-13 consecutive quarters. Quarters are strips of three individual and consecutive contract months. Quarters always comprise a strip of Jan-Mar, Apr-Jun, Jul- Sep or Oct-Dec.

13-14 consecutive seasons. Seasons are strips of six individual and consecutive contract months. Seasons always comprise a strip of Apr-Sep or Oct-Mar.

6 consecutive years. Years are strips of twelve individual and consecutive contract months comprising Jan - Dec.

Months, quarters, seasons and years are listed in parallel.

Expiration Date Trading will cease at the close of business two Business Days prior to the first calendar day of the delivery month, quarter, season, or calendar.
Contract Security ICE Clear Europe acts as central counterparty to all trades thereby guaranteeing the financial performance of ICE Futures Europe contracts registered in the name of its Members up to and including delivery, exercise and/or settlement.
Trading Model Continuous trading throughout trading hours
Trading Methods Electronic futures, Exchange for Physical (EFP), Exchange for Swap (EFS) and Block Trades are available for this contract.
Unit of Trading 1,000 therms of natural gas per day (1 therm = 29.3071 kilowatt hours)
Contract Size 1,000 therms per day per delivery period (ie month, quarter, season or year.)

Delivery Period Therms Feb (non leap year): 28,000 therms Feb (leap year): 29,000 therms Jan, Mar, May, Jul, Aug, Oct, Dec: 31,000 therms Apr, Jun, Sep, Nov: 30,000 therms

Minimum Trading Size 5 lots = 5,000 therms per day
Minimum Block Order 40 lots = 40,000 therms per day
Quotation The contract price is in Sterling and pence per therm
Minimum Price Fluctuation Futures - 0.01 pence/therm

EFP/EFS/Block - 0.001 pence/therm

Maximum Price Fluctuation There are no limits
Tick Size Contract Size x Minimum Trade Size x Minimum Price Flux
Settlement Price The weighted average price of trades during a ten-minute settlement period from 16:05:00 to 16:15:00, London Local Time. If there is low liquidity during this time, Quoted Settlement Prices (QSPs) will be used to establish the settlement price
Position Limit Positions are reported to the Exchange on a daily basis. The Exchange has powers to prevent the development of excessive positions or unwarranted speculation or any other undesirable situation and may take steps to resolve such situations including the ability to mandate Members to limit the size of such positions or to reduce positions where appropriate.
Initial Margin Calculated on all open contracts, Initial Margin, as defined in the ICE Clear Europe Clearing Rules, is a deposit held by ICE Clear Europe in order to cover the costs that may be incurred in closing out a position in default. It is returned upon the closing of the position, or at expiry, with interest.
Daily Margin All open contracts are 'marked-to-market' daily, with Variation Margin, as defined in the ICE Clear Europe Clearing Rules, being called for as appropriate.
Delivery/Settlement Terms Matching Acquiring and Disposing Trade Nominations (buyer from ICEU, seller to ICEU) are input by buyer and seller to National Grid via Gemini before 18:30 on the business day prior to the commencement of the delivery period. Delivery takes place in kilowatt-hours (29.3071 kilowatt hours per therm).

The EDSP will be the Settlement Price on the day the contract expires.

Markers TAS (Trade at Settlement)[3]
MIC Code IFEU
Clearing Venues ICEU
Trading Hours CITY TRADING PRE-OPEN
NEW YORK 2:00 AM - 12:00 PM

02:00 - 12:00

1:45 AM

01:45

LONDON 7:00 AM - 5:00 PM

07:00 - 17:00

6:45 AM

06:45

SINGAPORE 2:00 PM - 12:00 AM

14:00 - 00:00

1:45 PM

13:45

*Next Day

Sunday Pre-Open 5:40 PM ET; Closed on Saturday

Codes Clearing Admin Name IPE Nat Gas
Physical M
Logical GWM
GMI (FC) WM
ION A.C.N. 0960
UK Natural Gas Options
Trading Screen Product Name UK Natural Gas Futures
Trading Screen Hub Name NBP
Hedge Instrument ICE UK Natural Gas Futures contract.
Trading Period Up to 36 consecutive months.

Quarterly, seasonal, calendar, and any period of consecutive monthly contracts can be registered as a strip. For example, a Q1 option is an option on Jan, an option on Feb, and an option on Mar, with each option expiring five calendar days before the start of the relevant contract month.

Expiration Date Trading will cease when the intraday reference price is set, 12:50 - 13:00 LLT, of the underlying futures contract five calendar days before the start of the contract month. If that day is a non-business day, expiry will occur on the nearest prior business day, except where that day is also the expiry date of the underlying futures contract, in which case expiry will be occur on the preceding business day.
Contract Security ICE Clear Europe acts as central counterparty to all trades thereby guaranteeing the financial performance of ICE Futures Europe contracts registered in the name of its Members up to and including delivery, exercise and/or settlement.
Trading Hours 07:00 - 17:00, Local London Time (LLT), Monday - Friday.
Trading Model Continuous trading throughout trading hours
Trading Methods Electronic futures, Exchange for Physical (EFP), Exchange for Swap (EFS) and Block Trades are available for this contract.
Unit of Trading 1,000 therms of natural gas per day (1 therm = 29.3071 kilowatt hours)
Minimum Trading Size 5 lots = 5,000 therms per day
Minimum Block Order 25 lots = 25,000 therms per day
Quotation The contract price is in Sterling and pence per therm
Minimum Trading Size 5 lots = 5,000 therms per day
Strike Price Increments Strike range of 5.00-120.00 pence/therm.

Multiples of 0.01 pence per therm.

Minimum Price Fluctuation Futures Screen - 0.01 pence/therm

EFPs/EFSs/Blocks - 0.001 pence/therm

Maximum Price Fluctuation There are no limits.
Position Limit Positions are reported to the Exchange on a daily basis. The Exchange has powers to prevent the development of excessive positions or unwarranted speculation or any other undesirable situation and may take steps to resolve such situations including the ability to mandate members to limit the size of such positions or to reduce positions where appropriate.
Option Premium Equity-style such that premiums are paid at the time the transaction is executed.
Exercise Expires into the ICE UK Natural Gas Futures contract with European-style exercise. If the option is not abandoned, automatic exercise will occur for options which are one or more ticks in the money. At-The-Money and Out-of-The-Money options will expire worthless. Members will have up to one hour after cessation of trading on the option expiry day to manually abandon or exercise an option.
MIC Code IFEU
Clearing Venues ICEU
Codes Clearing Admin Name IPE Nat Gas
Physical M
Logical GWM
GMI (FC) WM
ION A.C.N. 0960
UK Natural Gas Options (Futures Style Margin)
Trading Screen Product Name UK Natural Gas Futures
Contract Symbol UKF
Hedge Instrument ICE UK Natural Gas Futures contract.
Trading Period Up to 36 consecutive months.

Quarterly, seasonal, calendar, and any period of consecutive monthly contracts can be registered as a strip. For example, a Q1 option is an option on Jan, an option on Feb, and an option on Mar, with each option expiring five calendar days before the start of the relevant contract month.

Expiration Date Trading will cease when the intraday reference price is set, 12:50 - 13:00 LLT, of the underlying futures contract five calendar days before the start of the contract month. If that day is a non-business day, expiry will occur on the nearest prior business day, except where that day is also the expiry date of the underlying futures contract, in which case expiry will be occur on the preceding business day.
Contract Security ICE Clear Europe acts as central counterparty to all trades thereby guaranteeing the financial performance of ICE Futures Europe contracts registered in the name of its Members up to and including delivery, exercise and/or settlement.
Trading Hours 07:00 - 17:00, Local London Time (LLT), Monday - Friday.
Trading Model Continuous trading throughout trading hours
Trading Methods Electronic futures, Exchange for Physical (EFP), Exchange for Swap (EFS) and Block Trades are available for this contract.
Unit of Trading 1,000 therms of natural gas per day (1 therm = 29.3071 kilowatt hours)
Minimum Trading Size 5 lots = 5,000 therms per day
Minimum Block Order 25 lots = 25,000 therms per day
Quotation The contract price is in Sterling and pence per therm
Strike Price Increments Strike range of 5.00-120.00 pence/therm.

Multiples of 0.01 pence per therm.

Minimum Price Fluctuation Futures Screen - 0.01 pence/therm

EFPs/EFSs/Blocks - 0.001 pence/therm

Maximum Price Fluctuation There are no limits.
Position Limit Positions are reported to the Exchange on a daily basis. The Exchange has powers to prevent the development of excessive positions or unwarranted speculation or any other undesirable situation and may take steps to resolve such situations including the ability to mandate members to limit the size of such positions or to reduce positions where appropriate.
Option Premium Futures Style
Exercise Expires into the ICE UK Natural Gas Futures contract with European-style exercise. If the option is not abandoned, automatic exercise will occur for options which are one or more ticks in the money. At-The-Money and Out-of-The-Money options will expire worthless. Members will have up to one hour after after cessation of trading on the option expiry day to manually abandon or exercise an option.
MIC Code IFEU
Clearing Venues ICEU
Trading Hours CITY TRADING PRE-OPEN
NEW YORK 2:00 AM - 12:00 PM

02:00 - 12:00

1:45 AM

01:45

LONDON 7:00 AM - 5:00 PM

07:00 - 17:00

6:45 AM

06:45

SINGAPORE 2:00 PM - 12:00 AM

14:00 - 00:00

1:45 PM

13:45

*Next Day

Sunday Pre-Open 5:40 PM ET; Closed on Saturday

Codes Clearing Admin Name IPE Nat Gas
Physical UKF
Logical UKF
GMI (FC) M:
ION A.C.N. None

Notes

Contracts are traded through the ICE Platform, by the Exchange of Futures for Physicals (EFPs), the Exchange of Futures for Swaps or Block Trades.

References

  1. Characteristics. UNCTAD.org.
  2. The most valuable commodity is information. ICE.
  3. TAS. {{{org}}}.

UK Natural Gas Contract Specs

Resources