Contracts traded on the financial gas market have two purposes: minimize price risk of natural gas spot market and minimize the basis risk from the changing price differential between the physical and financial gas contract. Financial gas contracts are also an instrument for speculation and price arbitrage in the gas market. They are seldom used for the physical delivery of natural gas. The most common financial gas contracts are forward contracts, swaps, futures and options. Forward contracts and swaps are usually custom tailored with all terms negotiated between the parties to the contract. Futures and options are standardized contracts typically traded in commodity exchanges such as NYMEX. Transactions in the financial gas market divide risk between the different market participants each of which have different risk characteristics and risk management skills. A distribution network company for example with an obligation to provide gas to end users is exposed to price risk because it is unable to adjust demand in response to changes in spot prices. Traders or brokers are more expert in managing risk and can therefore better absorb the price risk