FTR Option Contract Type
This contract type is a financial contract. If Energy Max is a positive number then this is a call option. If Energy Max is negative then this is a put option.
The value of the option is calculated as follows:
Call Option: If [Market FTR Value] >= [Strike Price] EXECUTE OPTION
The option value is [Energy Max] * ([Market FTR Value] – [Strike Price]) - [Capacity_Cost]. If the option is not exercised then the value is just –[Capacity Cost].
Put Option: If [Market FTR Value] <= [Strike Price] DON'T EXECUTE OPTION.
The option value is [Energy Max] * ([Strike Price] – [Market FTR Value]) - [Capacity Cost]. If it is not exercised the value is –[Capacity Cost].
The [Strike Price] for both options is in the Energy Cost column. The Capacity Cost column reflects the cost of owning the option.
The contract energy is determined by [Energy Max]*[Monthly Shape]*[Shape].
Relevant columns in the contracts table are Name, Number, Portfolio, FTR Name, Energy Cost, Energy Amount, Capacity Cost, Shape, Begin, and End.
NOTE: Users can specify an hourly limit in MWh in the optional Energy Amount Max field of the Portfolio Contract table.
FTR Option Contract Type
