(Montel) Paris-based gas exchange Powernext launched on Thursday automated trading in the spot market on its pan-European gas platform PEGAS in a bid to boost liquidity.
Vienna-based software company VisoTech will be the first independent provider of fully-automated trading at PEGAS with its real-time intraday solution Periotheus. The software is already being used by traders in the power markets.
“In gas markets, it’s less common to have traders working 24/7 shifts. But price changes can happen overnight and algorithms help catch opportunities to beat the competition without the high cost of night shifts,” said Tanya Graw, content marketing manager at VisoTech.
Powernext’s decision to launch automatic trading on the PEGAS platform comes against a backdrop of rising intraday volumes, the gas bourse said. This is prompting market participants, especially market makers and TSOs, to look for ways to optimise their portfolios.
“The complexity of balancing supply and demand of natural gas is high, and the usage of such algorithms increases liquidity of our markets and thus the efficiency of the short-term allocation of natural gas,” said Jan Richter, head of regulation and communications at Powernext.
Using a software vendor simplified the roll-out of trading automation, since market players could avoid the cost and effort of compliance testing, according to the exchange.
Some participants fear automatic trading as a death warning to traders in the short-term markets, as companies can let software execute orders instead of manually entering them.
“We don’t expect traders to lose their jobs, rather their job will be improved,” Graw said. “[The software] will take back the simple task of staring at the screen, waiting to click.”
PEGAS is the main gas spot platform in mainland Europe, and is present in the Austrian, Belgian, Czech, Danish, Dutch, French, German, Italian and UK market areas.
Article written by Herman Moestue and published on Montel News on June 28, 2018. © 2018 Montel AS
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