Powerisk talked about the two differing parties trading August with the buyer almost keen to pay through the offer (this can only be to mark a position higher) , the theory being that sacrificing 10MW to mark your position higher for a risk purpose may well be worth it. Equally the seller seems very keen to push the market below £42. This level could be because some options strikes exist and the option expiry is on Friday and so any attempt to keep this either below or above the strike will be justified by the option itself. In that if you are long the option you can afford to buy it all the way through the strike and then sell it back down again.

Perhaps more interestingly are the differing views held on the way the market will react.

Week 31 (first week of August) is trading at  circa £44 this looks cheap given that the week we are in will outturn at around £67. This big drop has to continue for the market to justify trading the month of August at £41.50. The seller obviously believes that it is very rare to have 18GW of plant off for a single week, which is predicted to be the hottest week in July on record, as a result they are banking on next week and the weeks in August, having a more normal outturn. This is not unjustified, as plant managers who have plant not operating in the weeks when they could be making £20- £30 MWh profit will be under extreme pressure to get their plant on line.