Share this
Concerned about your SPP virtual portfolios and trades being suboptimal in terms of diversification and risk? As an energy trader, it can be challenging to align and optimize your portfolio to fully leverage and align to ISO trade definitions and available functions.
The Southwest Power Pool (SPP) market offers a unique set of functions for day-ahead traders to optimize their trading strategies and manage risk effectively with block and slope trade functionality.
What Are Block Trades?
Block trades enable traders to bid/offer for a fixed quantity of electricity at specific prices for a continuous block of hours.
This type of trade is useful when a trader anticipates that the price of electricity will be consistently high or low over a certain period of time.
What Are Slope Trades?
Slope trades are more complex and dynamic, enabling traders to bid/offer for a varying quantity of electricity at different price levels over a period of time. The quantity of electricity bid changes in response to the market price, following a predefined slope or curve.
The bid/offer price points in a slope trade serve as the values to interpolate a linear curve with the underlying megawatts then having various price points across the curve.
The Benefits of a Solution for Block and Slope Trades
Using the available functionality of block and slope trades in the SPP day ahead (DA) market ensures that your portfolio is optimized to deliver results based on your trading strategy.
This provides a competitive edge, as you can better manage risk and tailor your trades according to your strategy. It also helps to avoid portfolios and trades that may be suboptimal or not balanced from a risk perspective.
Source: Market Protocols for SPP Integrated Marketplace
Yes Energy Can Help!
Submission Services takes the guesswork out of DA virtual and spread trade submission. It ensures you align to and fulfill ISO requirements with embedded block and trade functionality built directly in the submission process. This is all delivered to your front office through a visual portfolio analysis dashboard and an easy-to-integrate data API.
Our team of market experts stays abreast of ISO developments and ensures our solutions are proactively updated as required. This is all part of Submission Services providing exceptional performance in trade execution and validation. Put our knowledge and expertise to work for you so that you can keep the focus on maximizing your returns in the DA market.
Learn more about Submission Services today, or schedule a demo!
About the Author: Daniel Cullen has more than 10 years' experience in commodity and power markets. The majority of that experience focused on the development and delivery of performance and risk solutions. At Yes Energy, he serves as the product manager for Submission Services, Position Management, and FTR Positions Dataset.
