By 2025, one market had assumed a role in South-East Europe that extended far beyond its national boundaries. Hungary’s power exchange became the region’s primary hedge engine not because it was flawless, but because it was the only venue capable of absorbing risk at scale. For utilities, traders, and large industrial buyers operating across SEE, hedging strategy increasingly revolved around HUPX, even when physical exposure lay hundreds of kilometres away.
HUPX’s dominance did not emerge overnight. It was the cumulative outcome of geography, interconnection density, regulatory alignment, and early adoption of exchange-cleared forward products. By 2025, HUPX sat at the intersection of Central and South-East Europe, connected electrically and commercially to Austria, Slovakia, Romania, Croatia, and Serbia. This positioning transformed it into the natural aggregation point for regional risk.
From a liquidity perspective, HUPX’s spot markets provided the foundation. Throughout 2025, day-ahead trading consistently averaged around 70–80 GWh per day, while intraday volumes frequently exceeded 1 TWh per month. This depth ensured tight bid-ask spreads and rapid price discovery, making HUPX prices credible not only domestically but regionally. For hedgers, this mattered because a reliable spot reference underpins confidence in forward pricing.
More important, however, was HUPX’s forward market structure. Unlike most SEE exchanges, HUPX offered a complete ladder of physically settled futures: weekly, monthly, quarterly, and annual products. In 2025, the annual and front-quarter contracts attracted the bulk of activity, forming a de facto regional forward curve. These instruments became the primary tools for managing medium- and long-term exposure for portfolios well beyond Hungary.
In practice, HUPX could absorb single hedge clips of 20–30 MW in annual products without immediate market disruption. Through time-sliced execution, portfolios of 100–300 MW could be hedged over several weeks, something no other SEE exchange could reliably support. This capability alone elevated HUPX from a national venue to a regional hedge engine.
Yet HUPX’s strength also exposed its limits. Liquidity was tenor-concentrated, with open interest thinning sharply beyond the next delivery year. Rolling hedges forward required careful timing, as liquidity decayed rapidly in longer-dated contracts. Stress periods further amplified this constraint. During congestion events or regional supply shocks, spreads widened disproportionately, and execution costs rose faster than in core Western European markets.
These dynamics had spillover effects. Because SEE participants relied so heavily on HUPX for hedging, volatility originating in Balkan markets migrated into Hungarian forward prices. In effect, HUPX internalised regional risk. While this reinforced its central role, it also increased its sensitivity to events outside Hungary’s borders, from Serbian thermal outages to Romanian hydro deficits.
For Hungarian participants, this meant living with higher volatility than domestic fundamentals alone would justify. For SEE participants, it meant accepting that their risk was being warehoused in a market not fully aligned with their physical exposure. Basis risk persisted, but it was now managed against a deeper, more resilient benchmark.
By the end of 2025, HUPX’s position was clear. It was not a perfect hedge venue, nor a substitute for fully mature local forward markets. But it was the only market in the region capable of sustaining repeated, industrial-scale hedging cycles. Until other SEE exchanges develop comparable depth and tenor breadth, HUPX will remain the gravitational centre of regional power risk management, with all the benefits and vulnerabilities that role entails.
Elevated by virtu.energy