FCMs brace for ‘tough winter’ of energy market disruption

Banks stress-test clients, add big margin multipliers to insulate against risk of 100% price moves

The risk of highly volatile energy prices this winter has sent a shiver down the spines of futures and options clearers, who are responding by upping client margin and running hypothetical stress scenarios. Companies and governments in Europe are scrambling to prepare in case Russia stops or reduces gas supplies at a time of peak annual demand.

“It’s going to be another tough winter, so we’re gearing up for that,” says a risk executive at a large US FCM. “We have created ad hoc scenarios that