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.



The value-at-risk (VaR) of a portfolio is the worst loss expected to be suffered over a given period of time with a given probability. The time period is known as the holding period, and the probability is known as the confidence interval. VaR is not an estimate of the worst possible loss, but the largest likely loss.  For example, a firm might estimate its VaR over 10 days to be $100 million, with a confidence interval of 95%. This would mean there is a 1 in 20 (5%) chance of a loss larger then $100 million in the next 10 days.  In order to calculate VaR, a firm must model both the way the relevant market factors will change over the holding period and the way, if any, these changes are correlated between market factors. It must then evaluate the potential effects of these changes on its portfolio at the desired level of consolidation (by asset class, group or business line, for example).

Variation Margin:

The margin on a derivatives contract whose value varies in line with levels of volatility in the market. The higher the fluctuations in daily prices, the higher the variation margin.


A measure of the variability of a market factor, most often the price of the underlying instrument. Volatility is defined mathematically as the annualised standard deviation of the natural log of the ration of two successive prices. The actual volatility realised over a period of time (the historical volatility) can be calculated from recorded data.