There is no doubt that many traders have benefitted from volatile markets this year, most will be hoping for a bonus and will be aware that one bad trade in these markets could ruin a years good work. So for this reason the market should be quiet. However, with the market showing some serious anomalies, for example the clean spark spread is negative and so on this basis we should see power plant turn off, or the market correct this in the short term.

At the moment Spark spread prices on the day ahead are reasonably high (circa £10) but when the price rallies the spread gets wider, pushing out to £30+. This should encourage generators to buy forward and sell at prompt. This is not happening because players do not want to lose their bonuses, and also trading books tend to be handed over to an energy management centre who manage the exposure in the prompt. This therefore sees a discontinuous pattern in the trading curve, and stops traders from trading this opportunity. However, if prices continue like this until January then expect there to be a reversal, and a rise in January and February forward prices.