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Naked Option
An option that is purchased or sold without an offsetting position in the underlying asset (see also options).

A refined petroleum product used as a feedstock for the petrochemical industry. Comprises material in the 30 to 210 degrees centigrade distillation range, or part of this range.

Natural Gas
Gas consisting mainly of Methane and Ethane which occurs naturally in the earth's crust.

Natural Gas Liquids
Liquids produced along with Natural Gas. They consist mainly of propane, butane, natural gasoline and condensate.

Natural Hedge

A term occasionally used to describe a reduction in risk that can arise from an organisation's normal operating procedures. For example, a company which incurs expenses in a foreign currency may be said to be naturally hedged if it also generates revenues in that currency.


A provision in a physical power contract that allows the bearer to net a debt position with one counter party by offsetting it with a credit position with another counter party

Netback Price
Crude oil priced on the market value of its refined products.

Net Position
The difference between an entity's open long contracts and open short positions.

Net Present Value
A technique for assessing the worth of future cashflows by assessing the present value of those cashflows discounted at today's cost of capital.

Net Working Capital
Current Assets minus current liabilities.

New York Mercantile Exchange
The world's largest commodity exchange consisting of two divisions : NYMEX and COMEX. It has been estimated that 80% of the world's energy futures and options trading is conducted via NYMEX.

Nominal Interest Rate
Interest Rate expressed in money terms (as opposed to real interest rates).

Nonsystematic Risk
Risk that can be diversified away (see also systematic risk).

Normal Distribution
The standard bell shaped statistical distribution.

Unsecured debt with a maturity of up to 10 years.

Notional Value
The underlying principal value of either an exchange traded or over-the-counter transaction.

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