The market might come across as overwhelming at first. We did use real world mechanics in Sim Energy Empire, which better capture the nature of trading we want in the game.
Understadning and using market will allow you to buy and sell basinc resoruces like coal and gas, but also to hedge yourself against price swings.
You can also apply more advanced specualtion strategies described here:
Future Commodity Market
You might be familiar with trading shares, or i-general trading goods in other games. You esentailyl 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 house the moment you click buy. This is where the “futures” word come into play.
In real world, each trade has “maturity date” this is date in the future, when the goods will be delivered. In Sim Energy Empire, we mark the future with ticks. And 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 and start producing in T+2. You will need 20 tons of coal, in T+2.
So you can go to the market and buy 20 tons for T+2.
Let’s say you did that. This means, you paid for 20 tons, and there is a seller that 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 in your warehouse at the time the trade was made.
Another example: You have a new coal mine that will produce 70 tons every tick. You do not have any coal right now. But you want to ensure this coal will be sold in the future. You can go to the market and create sell trades of 70 tons for T+0, T+1, T+2, … basically contracting yourself to deliver 70 tons every tick in the future, but also getting money right now, and getting a buyer locked in.
In trading terminology, you now have a “short position” of 70 tons in every tick. You owe 70 tons to the market every tick.
Can I close my positions?
This is probably the best feature of the futures market. You can trade goods you do not even have.
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 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, the coal is now very cheap. You now do not owe any coal. And if the coal purchase price was lower then 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 obligation to deliver in the future was traded.
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 buyers.
And now .. the mine breaksdown, and you know it will not be producing. You will not have the coal you promissed you will deliver.
At this point, you shoudl probably go to the marekt and close your short position as described int he previous paragraph.
If you fail to do that, and the reis 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 any obligation to deliver (somebody else will deliver instead of you)
If the position cannot be closed, for example if there is no coal seller, you pay a fine.
Power Market
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.