Boston Energy Group primarily invests in financial and physical electricity futures contracts within the North American wholesale electricity markets, operated by Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) governed by the United States Federal Energy Regulatory Commission (FERC). Greatly simplified, our group identifies key geographical regions within the electricity grid which are over and/or under supplied in energy. Leveraging an amass of market data alongside our proprietary energy trading platform, we then take on carefully calculated investments as short-term energy futures on the wholesale electricity market.
The electrical trading market is unique among trading markets because its final product is a steady supply of electricity. Electricity cannot easily be stored. It must be continually generated and transmitted to customers. This makes it substantially different from other commodities markets, where it is possible to follow a buy and hold strategy. Understanding the physical constraints of power generation is essential to understanding the electricity trading market.
Electricity service relies on a complex system of infrastructure that falls into two general categories: generation and the delivery services of transmission and distribution. Two-thirds of the population of the United States and more than one-half of Canada’s population are served by electricity markets run by RTO’s and ISO’s. Power demand is generally insensitive to price, meaning that demand does not typically fall significantly when wholesale prices rise.
During periods of market turbulence, prices tend to be volatile, which give our traders the opportunity to take advantage of such volatility. When demand for energy is relatively stable, price variations tend to be small or non-existent. The greatest opportunities for profitable trades and investments occur during periods of market turbulence, when the forecast for supply or demand is more likely to be inaccurate. This can be caused by weather volatility, production or distribution disruptions, inaccurate weather forecasts, and a wide array of other factors.
The most significant profitability differentiator between one financial trading institution from another is the quality of talent it carries. As a trader’s profitability is directly correlated to their acquired biases and trading techniques, our group strives in sustaining our reputation for high-performance by implementing continuous improvement methodologies in our work and processes. Our considerable achievements in the industry stems from our deeply embedded passion for mastering the art of energy trading.
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