wilmott.com

a few comments about the 100- hours choice option in Nordpool.1. I would rather sell than buy this option. Why? Because of the D-1 nominations. The nominator would have a hell of a time picking the most expensive hours.2. You are definitely right about the price being dependent upon everybody's variable cost structure, but, guess what, nordpool has a marginal cost of around zero due to the fact that 90% of the production is, *the weather* *rainfall*. 3. Pricing, These options are really not options at all, they, are peakload contracts! They are called "user-time" *Brukstid* contracts. They are often traded as a package with baseload, ie: sell Brukstid, buy back baseload. IOW: Buy off-peak power. You pay a premium over the baseload price, so I would buy/sell brukstid for 33+Current Y-03 Baseload price.4. Bozz--- If you need a spread for a deal, send me a private message :v).--Segga

Just out of curiousity MP, since you are the authority on everything here, what do you think the vol skew looks like on these "swing options"?

"the details, the penalties (and rewards) [for market manipulation] are both huge...." but what are the chances of being caught? "usually the commodity prices will have a lower bound, it will not fall to a ridiculous price."usually.

"but what are the chances of being caught? "Hire good attoneys and make the probability of been caught smaller

"but what are the chances of being caught?"Very slim to medium. Is that what you wanted to hear? You always ask the best questions, Jungle

"Very slim to medium. Is that what you wanted to hear?"oh, just curious.