Please note that the data, examples and information on derivative financial instruments provided herein is for informational purposes only. This information has been prepared without consideration or regard of your knowledge or experience related to specific financial instruments and without having any information about your investment objectives or financial capacity to assume risks related to the conclusion of the transaction that meets your investment objectives; therefore, it cannot be construed as a personal investment recommendation, advice on trading in derivative financial instruments or investment research, order or invitation to buy or sell specific financial instruments and may not constitute any basis or part of any subsequent transaction.

The company takes part in the tendering procedure for the provision of services.

The winner will be paid in US dollars. Without being aware of the results of the tendering procedure, the company concludes a FX OTC option, i.

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The company has not been awarded a contract in the tendering procedure, and therefore, it refuses to perform a FX OTC option contract. The company is awarded a contract in the tendering procedure after three months. At that time, the US dollar exchange rate stands at 1. The company has concluded a FX OTC option contract; therefore, it exercises its right to sell US dollars at a more favourable rate of 1.

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Under the terms and conditions of the concluded FX OTC option contract, it is not profitable to sell the currency at the rate of 1. In case the option is sold, one is exposed to the risk of incurring losses that exceed the received premium in the future as a result of adverse changes in the currency value.

The seller of an option undertakes to buy or sell the currency at a pre-agreed rate, which may be unfavourable to the seller and greatly differ from the market price of this currency applicable at that time. If the seller of an option has such currency, he is exposed to lower levels of risk.

In case the seller has no currency, the risk might be high; therefore, only experienced market participants should consider the possibility of concluding this type of options. Before concluding the transaction, all the terms and risks of the transaction must be assessed. Options are concluded over-the-counter; therefore, it may be hard to determine the market value of the option — it is not always possible to find the purchase and selling prices of an option and to sell an option on the market or to close it by an offsetting option transaction. When you call the bank on Skype, we recommend that you always use the functionality available on www.

When you click this button to connect with the bank on Skype, you can only talk as there is no messaging or video functionality. Tel: 8 5 E-mail: fx seb. We recommend that before you sign any financial service agreement you read the service terms carefully and consult the staff of the bank if you need to. Your web browser does not correspond to the requirements needed to visit SEB website.

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To review or change the usage of cookies, please click "Manage cookie settings". Skip to main content. Menu Log in to Internet Bank. One aspect is clear, however: large power plants will continue to minimize their price risks through long-term OTC trading contracts. Furthermore, there are currently no signs that long-term trading will become fully institutionalized and render long-term OTC contracts obsolete.

For short-term trades, however, OTC trading has become less attractive; shorter trading and delivery periods make exchange trading an attractive option. In the long term, it is possible that renewable energy trades could shift to the OTC market with the pending expiration of subsidies. In the long term, it is likely that trading renewably-sourced electricity will shift from short to long trading periods, which have so far been defined individually in bilateral agreements.

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Being Flexible. Being Digital. Virtual Power Plant. Next Box. Control System. Power Trading. List of articles. Energy Blog. Blog posts. Power Market Report. Contact us. Knowledge » OTC trading. If a buyer and a seller execute a sales contract for a physical item, the seller hands the product over the counter to the buyer. This is the essence of "over the counter" or OTC trading.

In power trading, no physical goods are exchanged, but the principle of a direct, over-the-counter trade for electricity is the same. These trades takes place outside of power exchanges without intermediaries or clearing houses. In OTC trading, trading partners are in direct contact with each other or make use of a broker. The transactions themselves occur on trading platforms online or through brokerage companies.