Hedging strategies using forward curves in power markets
Traders who can turn uncertainty into profit tend to engage in more sophisticated forms of trading, one of which is edging using power forward curves. The core concept is to utilise market-led price signals over a certain period to help avoid the volatility of short-term sport prices, locking in lower-priced future energy reserves. Hedging using forward curves involves keeping on top of key drivers of market behaviour and understanding the trading implications of these drivers, as well as the associated risks, to execute hedging.
