During the 19th Century in America a market was set up to trade bear skins. Some of the traders forward sold positions, in fact they sold bear skins which they did not own. This is sometimes referred to as short selling, and if the market is on a donward spiral then short selling is smart as you are selling at a higher price to the one at outcome of delivery. The bear skin jobbers when in full flow would depress a market and hence the reason why a bear market is seen as a decline in prices.

Yesterday, oil gas and carbon all fell and as a result power fell with them. Perhaps worse hit were the prompt prices with over 2GW coming back onto the bars since last week nearly £10 was knocked off day ahead prices. Furthermore, Q4 took a similar bashing with over £2.40 knocked off prices, and Summer 06 remaining relatively high at just under £43/MWh. It is difficult to see the justification for Summer 06 remaining so high in comparison to Q4 05 with a spread differential of only three pounds. Assuming that Hurricane Rita does little damage, the bears will remain in this market as Carbon and Gas tick down to more competitive levels. The volatility players should be looking to get involved but the markets are so small that it is not worth it.