How Bounded Futures Work

ElectronX Bounded Futures are cash-settled electricity derivatives that let you buy or sell exposure to real-time electricity prices for a specific location and hour — with built-in limits on both your gains and your losses.

The core idea

A Bounded Future tracks the real-time price of electricity at a specific location (hub, zone, or interface) for a specific delivery hour. When you trade a Bounded Future, you are taking a position on where that real-time price will land.

Unlike a traditional futures contract, which may have unlimited upside and downside, a Bounded Future has a floor and a ceiling — a predefined price range. Your maximum gain and maximum loss are both capped by the bounds of the contract you choose. This cap enables the ElectronX fully collateralized model because the maximum potential loss for both the buyer and seller is known up front.

The three variants

Three price ranges are available per ISO, each covering different levels of market volatility. Because each ISO operates across a different price range, the specific floors, ceilings, and symbols differ by market. Each variant is a separate instrument.

Variant	Symbol	ISO	Floor	Ceiling
Standard	BFUT100	ERCOT, PJM, CAISO	$0	$100/MWh
Standard	BFUT200	MISO	$0	$200/MWh
Moderate	BFUT500	ERCOT, PJM	$0	$500/MWh
Moderate	BFUT300	CAISO	−$50	$300/MWh
Moderate	BFUT700	MISO	−$100	$700/MWh
Extended	BFUT2000	CAISO	−$150	$2,000/MWh
Extended	BFUT3500	MISO	−$500	$3,500/MWh
Extended	BFUT3700	PJM	−$50	$3,700/MWh
Extended	BFUT5000	ERCOT	−$250	$5,000/MWh

How P&L works

Your profit or loss on a Bounded Future depends on where the real-time settlement price lands relative to your execution price.

If you buy (go long):

If you sell (go short):

In both cases, the Settlement Price is bounded: if the actual real-time average falls outside the contract's range, it is capped at the floor or ceiling before P&L is calculated.

Settlement price: how it is calculated

ERCOT

ERCOT publishes Real Time Settlement Point Prices (SPP) every 15 minutes. For each hourly contract, the arithmetic average of the four 15-minute intervals within the contract hour is used as the Settlement Price.

For example, the 1:00 AM CT contract uses the average of the four prices ERCOT publishes for: 12:00–12:15 AM, 12:15–12:30 AM, 12:30–12:45 AM, and 12:45–1:00 AM CT.

If a price is outside the contract's bounds, the applicable floor or ceiling is substituted:

• If the average < floor → Settlement Price = floor
• If the average > ceiling → Settlement Price = ceiling
• If the average is within bounds → Settlement Price = the average

The first published prices provided by ERCOT are considered final and are not subject to further adjustment.

PJM

PJM publishes a verified real-time hourly Locational Marginal Price (LMP) for each contract hour. These verified prices are published the following day between 11:00 AM and 12:00 PM ET (T+1). ElectronX uses the verified hourly LMP directly as the Settlement Price.

Because PJM settlement occurs the following day, committed collateral is held overnight after a PJM contract expires.

MISO

MISO publishes a Preliminary Ex-Post hourly Locational Marginal Price (LMP) for each contract hour. These prices are published the following day by 8:00 AM ET (T+1). ElectronX uses that single verified hourly LMP directly as the Settlement Price.

Because MISO settlement occurs the following day, committed collateral is held overnight after a MISO contract expires.

CAISO

CAISO publishes Fifteen-Minute Market (FMM) Locational Marginal Prices every 15 minutes on their OASIS platform. For each hourly contract, the arithmetic average of the four 15-minute intervals within the contract hour is used as the Settlement Price.

For example, the 1:00 AM PT contract uses the average of the four prices CAISO publishes for: 12:00–12:15 AM, 12:15–12:30 AM, 12:30–12:45 AM, and 12:45–1:00 AM PT.

The exchange accepts the first eligible publication for each interval; revisions to previously published prices are not accepted. If CAISO fails to publish one or more of the 15-minute prices within 24 hours, ElectronX substitutes the most recently published prior eligible value in the average.

Bounding applies to all ISOs: if the calculated settlement price falls below the contract floor or above the contract ceiling, it is capped at the floor or ceiling respectively before P&L is calculated.

Contract expiry

A Bounded Futures contract expires at the end of its designated hour. The 2:00 PM CT contract (HE14) expires at 2:00 PM CT. For ERCOT and CAISO contracts, settlement follows immediately using real-time price data published during the hour. For PJM and MISO contracts, the contract closes at expiration but does not settle until verified LMPs are published the following day — PJM between 11:00 AM and 12:00 PM ET, and MISO by 8:00 AM ET.

You can close your position before expiration by trading out of it — entering the opposite side at any point during market hours. If you close before expiry, your settlement fee is returned to your Available to Trade balance.

Available contracts

At any given time, 120 contracts are available per instrument: every hour of the next 5 consecutive calendar days (24 hours × 5 days). As each hour expires, a new contract 5 days forward is automatically added. Hours are labeled by their hour-ending time: hour 1 ends at 1:00 AM, hour 14 ends at 2:00 PM, and so on. ERCOT is in CT, PJM is in ET, MISO is in EST*, and CAISO is in PT.

* MISO is always in EST, and does not change to EDT.

Collateral

Because ElectronX is fully collateralized, both sides of every trade must post collateral upfront to cover their maximum possible loss.

For zero-floor products (BFUT100, BFUT200, BFUT500):

For negative-floor products (BFUT300, BFUT700, BFUT2000, BFUT3500, BFUT3700, BFUT5000):

In all cases, actual Committed Collateral also includes execution, clearing, and settlement fees on top of position collateral.

Example use cases

Renewable energy price risk: A power seller during peak solar hours faces the risk of negative real-time prices. Selling a Bounded Future on the Standard or Moderate range during those hours hedges that downside. If prices go negative, the short position profits up to the floor of the contract.

Day-ahead to real-time spread: A generator whose supply bid was accepted in the day-ahead market at $40 but expects real-time prices to rise sharply can buy a Bounded Future to capture the expected increase. If real-time settles at $120 on a BFUT500, the long position captures the gain.

Event hedging: During periods of forecast extreme weather, a power buyer can buy an Extended Bounded Future to hedge against a price spike. The Extended contract offers coverage up to $5,000 (ERCOT), $3,700 (PJM), $3,500 (MISO), or $2,000 (CAISO) per MWh.

Trading hours

Monday–Friday, 7:00 AM–8:00 PM CT.

ElectronX's holiday schedule can be found under the Exchange Holidays tab at electronx.com/regulatory.