Business and Personal Finance Dictionary

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• SPARK SPREAD
  
  A trading strategy that reflects the difference in value between the cost of the energy used to produce electricity and the electricity. Hedging the spark spread currently involves the simultaneous purchase of natural gas contracts and sale of electricity contracts, or vice-versa, allowing market participants to procure a profit on the margin between the contracts, to hedge the cost of producing electricity. The spread itself is the difference between the market value of electricity and the cost of natural gas calculated in megawatt hours. The introduction of the coal futures contract will expand the spark spread trading opportunities .
  
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