IMOS - Carbon Allowance Trade
Requires the configuration flag CFGEnableCO2Exposure configuration flag to be enabled.
You can use the Carbon Allowance trade type to capture the trade details of Carbon Allowances to track their value against the market, link them to physical contracts, and account for them on your balance sheet.
Carbon Allowance in Trading
The Carbon Allowance contract type will be added to the Trading Profile and Trading P&L Summary - ‘Contract' group. The exposure will roll up to the CO2 exposure fields. Carbon Allowances will always be exposed in the Current period. A Carbon Allowance will only be in exposure when the status is either Confirmed or Invoiced.
View the Carbon Allowance - List
When the flag is enabled, there is a contract type under the Trades list in the Trading Module menu called Carbon Allowance – List.
Once selected, you can view a list of your Carbon Allowance trades.
Create a new Carbon Allowance trade
Once you select Carbon Allowance - List, a blank Carbon Allowance Trade form is available for data capture.
You can capture the following information on the form.
Type: (defaults to ‘EU Allowance')
Buy/Sell - "Buy“ or "Sell“
Trade Date - date field to capture the date the trade was made
Trade ID - system generated
Symbol - dropdown of commodity symbols marked as "carbon“
Status - select either Pending or Confirmed from the dropdown list
Price - price in the base currency of the trade
Curr - available currencies
Exch. Rate - number pulled from the latest exchange rate for the currency selected and system base currency; can be overridden
Quantity - quantity of the trade
Counterparty
Clearinghouse
Company
LOB
Department
Trader
Trade Area
Vessel Type
Strategy
Ref Contract
Reference
Broker Conf No
Broker Commission Table:
Broker - available brokers in the address book
Type - P - Percentage, R - Rate, L - Lumpsum
Rate/Lump - the value associated with the corresponding commission type
Payment - On Execution
Face Value (Base) - the calculated value of the trade ((amount * price) * exchange rate)
Commission - calculated commission amount
Remarks - free text field to capture notes
Carbon Allowance trade form options
On the Carbon Allowance trade form, you also have the following options:
Plus Sign ➕ - add a new trade
Magnifying Glass 🔎 - search for existing trades
Opens a separate input form with the following fields:
When more than one trade meets the search criteria, another form shows the matching trades to select from:
Save - save the trade with the latest information in the form
Blank page - clear the details in that trade form
Copy - create a number of copies of the trades
Delete - delete the trade
Attachment - open the attachment form and allow for attaching a file or links to the trade
Bulk Confirm Trades
Bulk Confirm Trade(s) logic is supported in the Carbon Allowance List. The system will both mark the trades as confirmed and add a broker confirmation number if one does not already exist.
Carbon Allowances in Trade Details List
In the Trade Details List, this Carbon Allowance contract will show the following fields:
ID - Trade ID
Short/Long - Buy/Sell
Contract Type - Carbon Allowance
Counterparty - Counterparty
Start Date - Always Today()
End Date - Always Today(+1)
CO2 Tons - Contract Quantity
CO2 Price - Contract Price
CO2 Market - from the Trading Profile
CO2 Price Source - for the market rate (ie the period the price is for)
CO2 Price Basis - for the market rate (ie the date the price was published)
CO2 Market Rate - for the period
CO2 Exposure - calculated from the CO2 Tons multiplied by the difference between the contract CO2 price and the Market CO2 Price and then converted back to the base rate; ((Market Rate - Contract Rate) * Quantity) * Exchange Rate
Net P&L - Same as CO2 Exposure
Position Status - ‘Confirmed’
P&L Status - ‘Unrealized’
Company Code - code of the company on the Allowance
Company Name - the name of the company on the Allowance
Strategy - Strategy
Created By - user ID who created the Allowance
Created On - timestamp when the Allowance was created in the system
Last Modified By - user ID who last changed the Allowance
Last Modified On - timestamp when the Allowance was last changed
Reference - Reference
Trade Area - Trade Area
Trade Date - Trade Date
Vessel Type - Vessel Type
Invoicing Support for Carbon Allowances
When the configuration flag CFGEnableCO2Exposure is enabled, the Create Invoice button on the Carbon Allowance trade will generate a new invoice form with details populated from the underlying contract. This workflow will be completed after the trade has been booked in the system and the invoice has been received.
Select Create Invoice on the trade, and the system will generate a Trade Settlement form.
Create Invoice option for a Carbon Allowance trade
These Trade Settlements will be shown in the Trade Settlement List
The Create Settlement link action is available and can be used to create a settlement for these trades
Transferred Carbon Allowances
You can use the Transferred checkbox on the Carbon Allowance form to indicate allowances transferred from a counterparty instead of bought from the market.
