Sim Energy Market
- Patrik Beck
- TheCenter
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.
Understanding and using market will allow you to buy and sell basic resources like coal and gas, but also to hedge yourself against price swings.
You can also apply more advanced speculation strategies described here:
Futures Commodity Market
You might be familiar with trading shares, or in-general trading goods in other games. You essentially 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 trader’s house the moment 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 use ticks to specify time in the future. 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.
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 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 appear 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.
Placing an order / trade
When you get to the city market …
Choose the resource: Power/Gas/Coal/Uranium
Choose the maturity date: T, T+1, T+2 when the goods should be taken/delivered
You can see the order book now:
Bids on the left (players wanting to buy)
Sells on the right (players wanting to sell)
Decide whether you are buying or selling
You can click Buy/Sell button, or you can click on an order you want to trade against
In the last step, you can input quantity and price
If you do not specify price, creating a market order, you will trade against quantity available on the market for price on the market
If you specify price, creating a limit order, you will trade only against orders on the market below this price. The remaining quantity that couldn’t be traded will stay offered on the market with the price you put it in.
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 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 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.
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 strong 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 to lock-in buyers.
And now .. the mine breaks down, you know it will not be producing. You will not have the coal you promised you will deliver.
At this point, you should probably go to the market and close your short position as described in the previous paragraph.
If you fail to do that, and the 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 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.
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 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, you 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 right away. 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, everything summed up, you sold 30MWh for $290, even though spot price was just $100.
Read more advanced trading strategies here: