{"id":1401,"date":"2014-11-29T09:02:54","date_gmt":"2014-11-29T15:02:54","guid":{"rendered":"https:\/\/allenergyconsulting.com\/blog\/?p=1401"},"modified":"2014-11-29T09:09:37","modified_gmt":"2014-11-29T15:09:37","slug":"another-30-return-in-month-time-next-trade-de-jour","status":"publish","type":"post","link":"https:\/\/allenergyconsulting.com\/blog\/2014\/11\/29\/another-30-return-in-month-time-next-trade-de-jour\/","title":{"rendered":"Another 30% return in Month Time? \u2013 Next Trade De Jour"},"content":{"rendered":"

It will be hard to beat my BEST winter trade call<\/a> for buying the Dec. 2014 AD-HUB minus NYJ spread \u2013 As of 11\/24\/14 close, the spread moved to -$31\/MWh vs. when we wrote about it at -$44\/MWh \u2013 up 30% since October 9th<\/sup> 2014.\u00a0\u00a0 I hope all of you took my advice when you read about it.<\/p>\n

Likely my last and final timely free call to you (in this case the release was delayed only a few days -some received an early release of the analysis ahead of time) will be to sell the January Ercot North On-Peak Heat Rate (ERCOT North On-Peak \/ Henry Hub) and to once again take a look at buying the AD-HUB minus NYJ Spread this time in March 2015.\u00a0 As previously discussed, the process<\/a> to identify these trades was to use the built in screeners from PMA-NT default runs.\u00a0 Then, a complete analysis was applied to stress test these trades, both from a future and historical perspective, as described in my previous article.<\/p>\n

The ERCOT North Heat Rate sell is based on over 50 simulations plus a historical perspective.\u00a0\u00a0 This is not going to be a huge money maker but the risk of loss is minimal.\u00a0 The current forward curve is showing a 10.11 mmbtu\/ MW heat rate. In the last 4 years, the highest heat rate achieved was 9.54 in January 2012 and the lowest was 8.4 January 2011.\u00a0 Based on over 50+ simulations, the average heat rate was 9 with only 1 simulation greater than 10 at 10.5.\u00a0 I feel very comfortable with this trade.<\/p>\n

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The AD-Hub minus NYJ On-peak spread has treated us very well this winter.\u00a0\u00a0\u00a0 Examining the March 2015 spread, we see the same opportunities.\u00a0 Currently, the spread is trading at -$23\/MWh.\u00a0 Unlike our past call, there is more risk in this trade.\u00a0 There is 1 simulation \u2013 the weather profile of 2013-2014 \u2013 which produces a -$52\/MWh trade.\u00a0\u00a0 This compares with the historical actuals of 2014 March of -$51\/MWh (Nice Calibration!).\u00a0 Outside last year, from 2009-2013, the March spread has averaged -$13\/MWh.\u00a0\u00a0 The 50+ simulations produced an average of -$16\/MWh (which includes the one simulation that was more negative than $25\/MWh).\u00a0 This is a great trade if you feel comfortable with the weather risk.\u00a0\u00a0 In our slew of simulations we did run the weather for the past 12 years with only 1 year indicating a loss for this trade.<\/p>\n

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I will release a new publication product \u2013 PMA-TradeWatch.\u00a0\u00a0 PMA-TradeWatch will screen out trades based on the default setup of PMA with a layer of historical screening.\u00a0 These trades will represent the first layer (identification) of trades to look into.\u00a0\u00a0 A file will be sent daily to subscribers.\u00a0 As I noted in my process in finding the BEST winter trade, it takes more work than the initial screen to really prove this to be a trade to place your money on.\u00a0 PMA-TradeWatch is a report to indicate to you potential trades.\u00a0 With this list it will narrow the amount of investigation.\u00a0 Ultimately I would recommend running more simulations and applying more historical analysis.\u00a0 Following this process will lead to successful trades similar to my best winter trade<\/a>.\u00a0\u00a0 We could facilitate the process for additional simulation and analysis for an additional fee.\u00a0 However, at some point, it would be more cost effective to do PMA-NT.<\/p>\n

We may release another product PMA-Elite which goes above and beyond PMA-TradeWatch and goes through the process and does the work to give these winning trades.\u00a0 PMA-TradeWatch is an ideal augmentation for those who already are staffed with a full team of analyst.\u00a0\u00a0 They can shoot holes and discover the winning trades from the list supplied by PMA-TradeWatch.\u00a0\u00a0 PMA-Elite is designed for traders needing the complete analytical solution to finding money making power trades.\u00a0 Both PMA-TradeWatch and PMA-Elite are focused on trading.\u00a0 Our other products are designed for greater breadth of usage \u2013 see below table for summary.<\/p>\n

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We hope that all our articles have proven the success and efficacy of our Power Market Analysis platform (Summer Trading<\/a>, Summer Hedging<\/a>, Winter Trading<\/a>).\u00a0 Please do consider All Energy Consulting for your analytical needs in the power spectrum.\u00a0\u00a0 All fuels ultimately lead to power.\u00a0\u00a0 Building up the energy foundation from power makes sure all things are tied together.<\/p>\n

I hope you had a wonderful Thanksgiving. \u00a0 Thank you so much for all of your support.<\/p>\n

Your VERY Thankful Need to Exercise Energy Consultant,<\/p>\n

David<\/p>\n

David K. Bellman
\nAll Energy Consulting LLC- \u201cIndependent analysis and opinions without a bias.\u201d
\n614-356-0484
\ndkb@allenergyconsulting.com
\n@AECDKB
\nblog:\u00a0 https:\/\/allenergyconsulting.com\/blog\/category\/market-insights\/<\/p>\n","protected":false},"excerpt":{"rendered":"

It will be hard to beat my BEST winter trade call for buying the Dec. 2014 AD-HUB minus NYJ spread \u2013 As of 11\/24\/14 close, the spread moved to -$31\/MWh vs. when we wrote about it at -$44\/MWh \u2013 up 30% since October 9th 2014.\u00a0\u00a0 I hope all of you took my advice when you […]<\/p>\n","protected":false},"author":1,"featured_media":267,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,6],"tags":[252,268,332],"class_list":["post-1401","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insights","category-power","tag-pma","tag-power-trading","tag-winter-trade"],"_links":{"self":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/1401","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/comments?post=1401"}],"version-history":[{"count":5,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/1401\/revisions"}],"predecessor-version":[{"id":1411,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/1401\/revisions\/1411"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media\/267"}],"wp:attachment":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media?parent=1401"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/categories?post=1401"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/tags?post=1401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}