IDEX- Italian Derivatives Energy Exchange

IDEX is the Energy Commodity Derivatives segment of IDEM.

Launched in 2008, IDEX is the only regulated financial market on Italian power derivatives and it currently offers both Baseload and Peakload Futures.

The unique characteristics of electricity price dynamics  determine high price volatility. Power Futures allow operators within the industry to mitigate undesired risks by providing hedging tools in a safe trading environment, promoting better business planning and greater operational profitability.

Product Characteristics

The underlying power spot market:

  • The Day-ahead Market is managed by a State owned company, GME (Gestore Mercati Energetici).
  • The Single National purchase Price (PUN: “Prezzo Unico Nazionale”) is calculated for every hour as a weighted average of the zonal prices determined on the day-ahead market.

Contract type: baseload futures (power delivered every day for 24 hours per day) and peakload futures (power delivered during peak-period from 08:00 hours to 20:00 hours Monday to Friday)

Delivery rate: 1 Megawatt (MW)

Delivery periods: monthly, quarterly, yearly

Cascading structure: only the futures with a monthly delivery period are settled

Settlement type: cash settlement

Optional physical delivery: Members of GME markets can ask for physical delivery instead of cash settlement

Settlement price: Single National Price (“PUN”) average during the delivery month

Expiries: next 3 months, 4 quarters and 1 year. The second annual expiry is traded from September to the end of December for baseload futures only.

Trading period: until last trading day before the beginning of the delivery period (monthly futures) or until cascading (quarterly and yearly futures)

IDEX: the right market for every type of participant

Each market participant of IDEX has a specific objective, and Power Futures allow these diverse objectives to be met by offering the below benefits to each party:

  • Suppliers/Producers: IDEX forward prices can be referenced for investment, trading and risk management purposes, as well as allow these market participants to hedge their particular market exposure or financing risk.
  • Consumers/Buyers: thanks to IDEX futures these players are not obliged to cover their power needs all in once during selling campaigns, and similarly to Producers they can use futures to hedge their particular market exposure or financing risk.
  • Financial Players/Traders: IDEX enables financial players to benefit from exposure to a new asset class participating to liquid trading in power futures and eliminating counterparty credit risk, which allows them to pursue greater returns on capital and to diversify portfolios.

Trading and Order Types

Trading on IDEX takes place on the SOLA platform which is the same platform  used for the Derivatives market, IDEM. IDEX provides members with several types of orders to enter, modify or cancel on the electronic order book and every type of order can be sent out with specific features for execution criteria. Orders are always processed according to price/time priority criteria.

Single Order: Buy/sell order sent to the market specifying a price limit

Stop Order: an event-driven order remaining inactive until the price of the underlying contract reaches the ‘trigger price’. Stop-loss orders become active when the market price is equal or higher than (or equal to  and lower than) the trigger price

Iceberg Order: Orders with limited disclosed quantity to be filled. Once the displayed quantity is filled, a new order is generated with the same partial displayed quantity-or with the remaining quantity-with the same price level as the original order, but with new time priority

Market Maker Quotes: Buy/sell orders inserted by market makers, according to their obligations

Committed Cross Order: Aimed at the conclusion of a contract in which the counterparties are predetermined, and where the set price is included within the order book price spread

Internal Cross Order: Aimed at the conclusion of a contract where both counterparties are formed by the single operator who entered the order, and where the set price is included within the order book price spread

Block Orders: Cross orders can be entered at a price outside the order book price spread if the contract quantity is equal or greater than:

-          50 contracts for monthly futures

-          30 contracts for quarterly futures

-          15 contracts for annual futures

Market Making

In order to improve the liquidity of IDEX, Borsa Italiana may provide for the intervention of market markers. Types of market makers are:

Primary Market Makers: Required to display bids and offers on a continuous basis for both baseload and peakload monthly, quarterly and yearly futures

Market Makers: Required to respond to request for quotations for both baseload and peakload monthly, quarterly and yearly futures, within two minutes; the response must remain on the book for at least 15 seconds

Liquidity Providers: Required to display bids and offers on a continuous basis for baseload and/or peakload monthly futures and/or quarterly futures and/or yearly futures

In displaying the bids and offers and in responding to request for quotation, primary Market Makers, Market Makers, and Liquidity Providers must observe the following table (spread is the maximum permitted difference between bid and ask prices)



Minimum number of displayed contracts

Spread €/MWh

Baseload montly futures



Baseload quarterly futures



Baseload annual futures (1st expiry)



Baseload annual futures (2nd expiry)



Peakload montly futures



Peakload quarterly futures



Peakload annual futures



The quotation obligations shall begin at 09.30 and end at 17.40. Primary Market Makers and Liquidity Providers are required to restore their quotations within two minutes of a hit on the book