How forward curves are constructed

The market only quotes prices for certain liquid delivery periods. A forward curve fills in the rest, a price for every delivery period, by interpolating through those quotes.

1. Gather quotes: liquid futures, forwards, and swap prices across tenors.
2. Bootstrap: resolve overlapping instruments (e.g. quarters and calendars) into consistent underlying periods.
3. Interpolate: fit a smooth curve through the resolved points to price every period.
4. Shape: for power and gas, apply seasonality and granularity, monthly, daily, even hourly shapes.

Energy curves are not smooth: winter gas trades above summer, and power has intraday shape. Construction preserves these patterns so valuations reflect real delivery economics , see how this plays out per commodity on the commodity pages.

Because curves change constantly, each is stored as versioned reference data (slowly-changing dimensions), so any valuation reproduces exactly as-of its date. See forward curves explained for the concept.