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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.

  1. Type: (defaults to ‘EU Allowance')

  2. Buy/Sell - "Buy“ or "Sell“

  3. Trade Date - date field to capture the date the trade was made

  4. Trade ID - system generated

  5. Symbol - dropdown of commodity symbols marked as "carbon“

  6. Status - select either Pending or Confirmed from the dropdown list

  7. Price - price in the base currency of the trade

  8. Curr - available currencies

  9. Exch. Rate - number pulled from the latest exchange rate for the currency selected and system base currency; can be overridden

  10. Quantity - quantity of the trade

  11. Counterparty

  12. Clearinghouse

  13. Company

  14. LOB

  15. Department

  16. Trader

  17. Trade Area

  18. Vessel Type

  19. Strategy

  20. Ref Contract

  21. Reference

  22. Broker Conf No

  23. Broker Commission Table:

    1. Broker - available brokers in the address book

    2. Type - P - Percentage, R - Rate, L - Lumpsum

    3. Rate/Lump - the value associated with the corresponding commission type

    4. Payment - On Execution

  24. Face Value (Base) - the calculated value of the trade ((amount * price) * exchange rate)

  25. Commission - calculated commission amount

  26. 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:

  1. ID - Trade ID

  2. Short/Long - Buy/Sell

  3. Contract Type - Carbon Allowance

  4. Counterparty - Counterparty

  5. Start Date - Always Today()

  6. End Date - Always Today(+1)

  7. CO2 Tons - Contract Quantity

  8. CO2 Price - Contract Price

  9. CO2 Market - from the Trading Profile

  10. CO2 Price Source - for the market rate (ie the period the price is for)

  11. CO2 Price Basis - for the market rate (ie the date the price was published)

  12. CO2 Market Rate - for the period

  13. 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

  14. Net P&L - Same as CO2 Exposure

  15. Position Status - ‘Confirmed’

  16. P&L Status - ‘Unrealized’

  17. Company Code - code of the company on the Allowance

  18. Company Name - the name of the company on the Allowance

  19. Strategy - Strategy

  20. Created By - user ID who created the Allowance

  21. Created On - timestamp when the Allowance was created in the system

  22. Last Modified By - user ID who last changed the Allowance

  23. Last Modified On - timestamp when the Allowance was last changed

  24. Reference - Reference

  25. Trade Area - Trade Area

  26. Trade Date - Trade Date

  27. 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.


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