When the I-SEM detailed design was released, many participants were concerned about potential liquidity issues in the Intraday Continuous (IDC) market. It would seem that their concerns have merit. As the first few weeks of I-SEM have certainly displayed low volumes in comparison to the Day-Ahead Market (DAM) and three Intraday Auctions (IDA1, IDA2 and IDA3).
The IDC is important because it allows traders to trade out positions close to the balancing market gate closure, and thus potentially avoid unfavourable imbalance charges. As the IDC was designed as local-only (i.e. trading is only between participants in Ireland and not cross the border with GB) there seemed to be a high probability that when traders went to the market to adjust their positions, there would be no one on the other side to make a deal with.
This week’s blog examines the types of volumes we’ve been seeing in the IDC. It examines both a particular week and on one day selected randomly. We also consider positions traders might be finding themselves in as a result of low liquidity. As well as how they may find themselves paying high prices to protect their exposure to even higher imbalance prices.
