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Anyone here educated on Financial Transmission Rights?
Posted on 8/31/11 at 11:25 am
Posted on 8/31/11 at 11:25 am
quote:
Challenges to Forecasting Future Value of Financial Transmission Rights
Forecasting electric power demand for months in advance to several years in advance is a daunting task. Forecasting transmission congestion for these same periods is even more daunting and challenging. Therefore, forecasting the future value of Financial Transmission Rights requires the use of simulation software that models the electricity markets under a range of operating conditions, weather/climate conditions, load growth scenarios, planned outages, transmission expansion and generation expansion scenarios that effectively forecasts future expected value of the Financial Transmission Right.
This is an area that I do have some academic credentials in so I'm curious if there is any way for an individual investor to get into this market.
3
Posted on 8/31/11 at 12:16 pm to Powerman
I've worked on a couple energy trading shops that traded pretty heavily in these... the short answer to your question is no, not easily anyway. FTR's are offered by each respective transmission organization (i.e. ERCOT, PJM, MISO, etc) so you would need to become a member of each, something they don't offer to individual investors.
This post was edited on 8/31/11 at 12:18 pm
Posted on 8/31/11 at 6:53 pm to sneakytiger
I had a feeling it might work like that
I wonder how one might get a job working as a consultant in the area since there seems to be a huge barrier for individual trading (which might be a good thing)
I wonder how one might get a job working as a consultant in the area since there seems to be a huge barrier for individual trading (which might be a good thing)
Posted on 8/31/11 at 7:49 pm to Powerman
I'm at a Retail power company in Houston. I'd advise looking at a few power companies and see if you can get an Analyst position in the Supply or Trading areas. Or you could go for a position in a Risk Mgmt group that produces position reports to get a basic understanding then try to work your way into trading. You usually have to pay your dues before moving into a trader job.
Posted on 8/31/11 at 8:10 pm to dandan
quote:
You usually have to pay your dues before moving into a trader job.
It sounded like the OP wasn't looking for a career change, but rather to trade personally.
I don't know a damn thing about these, but I wouldn't be surprised if the market just isn't set up to cater to individuals unless they have institutional-size bank accounts.
Posted on 8/31/11 at 11:14 pm to Powerman
A consultant to who or what? Seems like it'd be difficult to break into without having heavy trading experience. Pretty much any entity trading these things is doing the type of modeling that you quoted in the OP. I know of one trading firm in particular that specialized in these things... a lot of their traders have phd's in engineering. Is that what you're interested in?
This post was edited on 8/31/11 at 11:14 pm
Posted on 8/31/11 at 11:22 pm to sneakytiger
Go back to 1997. Work for Enron for 2 years doing this. Sell stock and quit. Profit.
Posted on 9/1/11 at 9:13 am to Powerman
You could approach one or more of the outfits that actually trade in the market and ask if they would like to collateralize some of their trade positions. In effect you would be makiong the investments through them. If you approached with a large enough pool of capital I'm sure they would let you assume the risks.
Posted on 9/1/11 at 9:17 am to Powerman
I work in this area. You can get in as an individual if you would like. It does take a monster credit line (~25M+). Check the market requirements (public docs) for the one you are interested in.
You are likely best off working for a company already in it. The current market participants can typically be found on the market operator's site.
You are likely best off working for a company already in it. The current market participants can typically be found on the market operator's site.
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