Like many industries, the energy industry has developed an language all of it's own. Brokers and suppliers talk about Duos Charges and Triads and avialabiity, but what to they actually mean?

We've put together what we think is the most complete glossary of energy terms on the net, if you can't find what you're looking for here give us a call and we'll see if we can help you.

M

Margin:

Cash deposits required for a futures contract that serve as good faith deposit guaranteeing that both parties to the agreement will perform the transaction at some point in the future.

Margin Risk:

The risk that a company will fail to make a margin call.

Mark-to-market:

To mark-to-market is to calculate the value of a financial instrument (or portfolio of such instruments) at current market rates or prices of the underlying. Marking-to-market on a daily (or more frequent) basis is often recommended in risk management guidelines.

Market marker:

An energy trader or energy trading firm that is prepared to buy and sell in the derivatives market to provide a two-sided (bid/ask) market and greater liquidity.

Market Risk:

Market risk is the risk that values will be lost due to a change in some market variable, such as commodity or equity prices, interest rates or foreign exchange rates. The market risk of a derivatives position may arise from a change in the value of the underlying market or from other sources such as implied volatility or time decay (theta).

MCF:

Million cubic feet

Meter Operator (MO or MOP)

The Meter Operator or MO or MOP is the organisation appointed to install and maintain metering equipment

Metric ton (tonne):

A metric is 2,204.62 pounds (lbs).

MMBTU:

Millions of British thermal units.

MMSCFPD:

Millions of cubic feet of gas per day.

Monte Carlo Simulation:

A method of pricing derivatives by simulating the evolution of the underlying variable (or variables) many times over. The average outcome of the simulation is an approximation of the derivative’s value.  Monte Carlo is useful in the valuation of complex derivatives for which exact analytical solutions have not been found, but it can be very computationally intensive. Monte Carlo simulation can also be applied to a portfolio of instruments, rather than a single instrument, to estimate the value-at-risk of that portfolio.

Moving Average:

The average of commodity prices contracted for a period as short as a few days or as long as several years, which shows trends for the latest interval. For example, a 30-day moving average includes yesterday’s figures; tomorrow, the same average will include today’s figures and will no longer show those for the earliest date included in yesterday’s average. Every day it records figures for the latest day and drops those for the earliest day.

MW:

Megawatts – a million watts.

MWh:

Megawatt hour.

MWe:

Megawatt of electricity, a unit of power. The ‘e’ specifies the electrical output.

MWth:

Megawatt thermal.