Trading scarcity: How to spot and profit from tight system conditions
Power markets sometimes enter scarcity regimes - periods when available supply nears or drops below expected demand. These regimes offer unique trading opportunities because prices deviate from standard volatility patterns. For senior traders, portfolio managers, system analysts, and risk committees, recognising scarcity early, understanding its transmission over different timeframes, and adopting scarcity-specific trading strategies are essential to capturing value while managing tail risk.
