Abstract:

Although the history of derivative products is dating back to many years it began to gain importance at the end of the 20th century. Within the scope of changing risk perception in financial markets, the use of derivative products has become widespread. First of all, this study has tried to explain derivative products. And then to get a better understanding of electricity derivatives market, this study dealt with electricity as a commodity with its own characteristics. Also, the most prevalent electricity contracts all around the World was mentioned with their features and structure of Turkey’s electricity contracts are explained. In conclusion, Turkey hasn’t got a surplus of variety in electricity derivative market yet. In that respect, there is a need to create applicable natural gas and carbon markets. And supportive attempts at OTC electricity market is needed for better market conditions. In addition to that for ensuring the continuation of growth at electricity markets, electricity derivative market liberalization process in the 2000s must continue.

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