Welcome
Settings
Policy
COOKIES
We use cookies to give you the best online experience. Strictly necessary cookies are on by default. Additional cookies are off by default. You can choose which of these additional cookies to allow by enabling them on our settings tab.
All the data we collect is anonymous, in accordance with the GDPR.
Your cookie preferences will be stored for one year, but you can modify your preferences at any time by clicking on ‘Cookies’ in our footer.
Analytics
These cookies track what pages are visited on our website, to help us monitor and improve our content.
Cookies
We use cookies from:
- Google Analytics
- Zoom Info
Media
We embed videos and other media hosted by third parties. Cookies help us keep track of what videos are being watched, and allow those third parties to serve you related content on their own sites. The videos will still work if you do not accept cookies.
Cookies
We use cookies from:
- YouTube
- Vimeo
Other
Miscellaneous cookies – currently none from third parties.
Cookies
xxx
Essential
Cookies
Cookie policy
Hybrid Swap
A hybrid swap is a derivative contract that combines elements of both physical and financial settlement. It allows counterparties to manage price risk while retaining flexibility around delivery, volume, or settlement structure. Hybrid swaps are often tailored to meet specific commercial needs.
For example, a power producer may enter into a hybrid swap that financially settles if generation occurs as expected but converts to physical delivery if certain thresholds are met. This structure allows risk management while accommodating operational uncertainty.
Hybrid swaps introduce additional complexity, including optionality and embedded risk. Valuation requires careful modeling of both market prices and operational outcomes. Despite this complexity, hybrid swaps are valuable tools for participants seeking customized risk solutions beyond standard derivatives.