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You can also apply more advanced specualtion strategies described here:
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Futures Commodity Market
You might be familiar with trading shares, or iin-general trading goods in other games. You esentailyl essentailly pay money and get shares/goods, or other way around.
In the real world, when trading commodities, like gold. The gold does not magically appear in your trader’s house the moment you click the buy button is clicked. This is where the “futures” word come into play.
In the real world, each trade has “maturity date” this is a date in the future, when the goods will be delivered. In Sim Energy Empire, we mark use ticks to specify time in the future with ticks. And we use denotations like T+3 (3 ticks form now) or T+0 (upcoming tick).
Here’s a simple example how it works: You know your coal plant will finish upgrade in T+1 and start producing in T+2. You will need 20 tons of coal, in T+2.
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Let’s say you did that. This means, you paid for 20 tons, and there is a seller that who is obliged to deliver you 20 tons in T+2. Using the market terminology, you can say you have a “long position” of 20 tons. Note, the coal did not magically appeak appear in your warehouse at the time the trade was made.
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For example, you expect to have 100 extra tons of coal in T+10. So, you sell them and create short position of 100 tons in T+10. Then 5 ticks pass, the coal in your city becomes really abundant, cheap, with too many producers. You decide that it’s not really worth even having a coal mine.
You decide to sell decommission (scrap) the mine.
But wait, you are still obligated to sell 100 tons in T+5 (It was T+10, but 5 ticks passed).
You can go to the market and buy 100 tons for T+5, as mentioned before. As mentioned just now, the coal is now very cheap, with too many sellers.
So, you bought the 100 tons in T+5 to close the short position. You now do not owe any coal. And if the coal purchase price was lower then the original sell price, you made profit.In the trading terminology, you have closed your short position, by buying coal.
Consider this: You both sold and bought coal, made profit, and the coal was never delivered, it was never in your warehouse, it may not even existed. Only the obligation to deliver in the future was traded.
Side note: In the real world, when a trading house like a hedge fond invests in commodity, for example gold or crude oil. They only buy futures, which they always sell before the maturity date. They can use that money to buy more futures with later maturity date. This way, they can make profit on rising gold prices without having to deal with logistical issues of stroing gold or crude oil.
Failing to deliver against obligation
You should avoid this, but it can happen. Imagine you have a coal mine running, so naturally you sell tons of coal for each future tick, to both get paid, but also ensure to lock-in buyers.
And now .. the mine breaksdownbreaks down, and you know it will not be producing. You will not have the coal you promissed you will deliver.
At this point, you shoudl should probably go to the marekt and close your short position as described int he in the previous paragraph.
If you fail to do that, and the reis there is no coal to be taken out of your warehouse at the tick time, the position will close automatically for you. The coal will simply by purchased from the market automatically, so you don’t ahve won’t have any obligation to deliver (somebody else, the seller who you closed against, will deliver instead of you).
If the position cannot be closed, for example if there is no coal seller, you pay a fine.
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The power trading works the same way, the only exception is all positions: short or long have to be closed when tick passes. The reason is simple, the power cannot be delivered to yoru warehouse.your warehouse.
Only power that can be instantly used is produced, this is ensured by mechanics described here:
So, when you trade power on the market, yoc can create long or short positions by buying or selling. These positions will always be automatically closed for you at the spot price at the tick time.
Note, that the market trades have no impact on whether your power plants run. Or whether your battery charges/discharges.
You can think of the power market as pure speculation. However, in principle, it allows you to ensure good power selling price.
Imagine a very simple scenario where your plant produces 30 MWh every tick. You can either let it be sold for spot price, or you can go to the power market and sell 30MWh of power, let’s say the market price is $290.
So you sold the 30MWh and got 30 times $290 rightaway. You got cash.
Let’s say the spot price ends up being $100, at the tick time, what happens is:
You plant produces 30MWh which is sold for $100, the spot price
Your short position is closed by buying 30MWh for the spot price.
The 2 cancelled each other out, you do not pay anything.
Overall, everyhing summed up, you sold 30MWh for $290, eventhou spot price was just $100.
Read more advanced trading strategies here: