Category: ⚡ Markets & Operations
Complexity Level: ●●○○○ (Level 2 - Practical Concept)
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Energy trading is the activity of buying and selling electricity products in Ontario's wholesale electricity market.
Traders can represent generators, large consumers, retailers, storage operators, or trading firms. Their goal is to make decisions that create financial value while supporting efficient market outcomes.
In Ontario, trading takes place within market rules administered by the Independent Electricity System Operator (IESO) and shaped by the Market Renewal Program (MRP).
⚡ Energy trading turns market forecasts into buy/sell decisions.
Traders estimate future prices, submit market bids or offers, and manage risk when real-time conditions differ from expectations.
Energy Trading
The process of buying and selling electricity products across market timeframes (such as day-ahead and real-time) to manage risk or earn a return from price differences.
At a basic level, energy trading usually follows a repeatable process.
Common strategies include:
A trader expects hot weather to increase real-time electricity prices in the evening peak.
If losses, fees, and balancing costs total $120, net trade margin is $680.
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Energy Traders
This topic explains the different types of organizations and roles that perform energy trading activities.
Last Updated: 2026-03-27