Page 161 - PRIAA Glossary

SWAPTION
The option to enter into a swap. In exchange for an option premium, the buyer gains the right but not the obligation
to enter into a specified swap agreement with the issuer
on a specified future date. The agreement specifies whether the buyer of the swaption is a fixed-rate receiver or a fixed-rate payer.
SWING (GAS)
In gas purchase agreements, the swing factor is a measure of the flexibility to vary nominations.
SYSTEM PRICE
The benchmark official price for electricity or gas sold within an integrated grid/transmission system for a specific delivery point and time.
SYSTEMATIC INTERNALISER
An investment firm, traditionally called a market maker, who could match buy and sell orders from clients in-house, provided that they conform to certain criteria. Instead of sending orders to a central exchange, such as the London Stock Exchange, banks can match them with other orders on its own book. Examples of such firms include Credit Suisse and UBS. SIs are able to compete directly with stock exchanges and automated dealing systems, but they have to make such dealings transparent. They have to show a price before a trade is made. After a trade is made, they have to give information about the transaction, just like conventional trading exchanges.
SYSTEMATIC RISK
Market risk due to price fluctuations which cannot be eliminated by diversification.
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