Kansas City, Missouri-based exchange that lists natural gas futures and options contracts based on delivery in the Permian Basin, Texas.

   a value representing the expected change in the price of an option. Also known as Lambda.

   medium-light distillate used as fuel for jet engines, with a boiling range of 150°–260° Celsius. Also called jet kerosene.

   a valuation model developed by the mathematician Valery Kholodnyi for use in valuing and hedging electric power price risks in environments of extreme price spikes.

   1,000 watts.

   unit of electricity equivalent to the power of one kilowatt operating for one hour. For example, 10 100-watt light bulbs burning for one hour would consume one kilowatt hour of electricity.

   a parameter describing the peakedness and tails of a probability distribution relative to the benchmark log normal distribution.

   an agreement made in Kyoto, Japan, in December 1997 under which industrialised countries agreed to adopt specific goals and timelines for nationwide reductions of greenhouse gas emissions between 2008 and 2012. The two major mechanisms for achieving this established under the protocol are emissions trading and the Clean Development Mechanism. The EU and its Member States ratified the Kyoto Protocol in May 2002. The EU has a target goal of 8% reduction in greenhouse gases and Japan’s goal is a 6% reduction. The Protocol came into effect for all signatory countries on February 16, 2005. As of December 2008, the US had not ratified the Kyoto Protocol.