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Virtual bidding is a strategy implemented in various Independent System Operator electricity markets of trading Day-Ahead prices against Real-Time (or Hour-Ahead) prices. The term "bid" can be used loosely in electricity markets to refer to an offer to buy or to sell. And the term "virtual" is used to refer to the fact that, while these trades occur in a physical market, virtual trades never entail taking a physical position—because every sell (or buy) Day Ahead will be closed by a buy (or sell) in Real Time. The ISO maintains a trade execution system that ensures all virtual positions will be closed before delivery time. A virtual bidding platform gives financial entities a way to participate in these physical markets, with no physical assets or presence on the grid. They can attempt to capitalize on regular divergences between these markets of different time period for the same underlying (perhaps using time, absolute price levels, or other external variables as conditioning factors). If this strategy of trading one time period against another without the intent (or perhaps even the ability) to deliver or receive physical power is implemented outside of a transaction system that identifies virtual bids and ensures they will be closed, it may be referred to as "implicit" virtual bidding. Virtual positions are included in the same simultaneous feasibility tests and price determination processes as real positions. Thus they can serve to reduce inefficiencies in the market.
Virtual bidding is a form of speculation not dissimilar to futures trading in the other commodity markets. Virtual bidding is the buying and selling of electricity without ever physically producing or consuming it. Instead all trades are offset in a subsequent market thus preventing physical delivery. There are a number of differences between virtual bidding and traditional commodity markets. Prominent amongst these are that virtual bidding occurs in electricity markets that are discrete, whereas most commodity markets allow for continuous trading. In addition virtual bidding usually occurs for very short time horizons, usually between the day-ahead market and the real-time market. There is no reason why it should not occur in different electricity markets. For example, buying and selling monthly contracts for a common delivery point such as the California-Oregon Border (COB) without ever taking physical delivery is extremely similar to virtual trading, although in this latter case the product is not explicitly identified as a virtual product. Identifying virtual trades explicitly occurs in all the organized Independent System Operator-type markets and confers the benefit of not co-mingling truly physical bids with financial bids. This clear delineation prevents the financial act of speculation from unduly affecting the reliability of the electric system.
Virtual bidding is implemented for a number of reasons, not the least of which is the fact that in its absence there is a tendency for implicit virtual bidding to occur, and the presence of this practice tends to create difficulties for grid operators. There are many benefits of virtual bidding besides the fact that its presence creates an appropriate avenue for arbitrage and in essence assists reliability. The most commonly identified benefits are as follows:
Virtualbidding is a strategy implemented in various Independent System Operator electricity markets of trading Day-Ahead prices against Real-Time (or...
A virtual data room (sometimes called a VDR or Deal Room) is an online repository of information that is used for the storing and distribution of documents...
protocol that the bidding cards stay revealed until the first playing card is tabled, after which point the bidding cards are put away. Bidding pads are an...
limiting the number of bids, click-box bidding, and anonymous bidding in order to prevent bidders from signalling bidding information by embedding it into digits...
outsourced by webmasters. Bid for Position directories, also known as bidding web directories, are paid-for-inclusion web directories where the listings...
in-person auctions, online auctions come in a variety of types, with different bidding and selling rules. eCommerce sales for businesses have been steadily increasing...
Enabling Virtual Bidder Conference functionalities is a crucial feature in most of the Procurement Portals. Virtual Bidder Conferences permit bidding contenders...
as working capital. After months of bidding, the six licenses sold for a total of US$404,000. "Man buys virtual space station for 330k real dollars"...
like 'Bridge Master' and 'Minibridge'. Partnerships can practice their bidding methods at Teaching Tables. Users can register at no cost. Many playing...
failed to meet contractual obligation, as well as financial reasons. The bidding process to determine the host of the 2027 Pan American Games was to begin...
conventions in swing states. Houston had previously taken steps towards bidding, but decided against it due to conflicts with other scheduled events at...
Georgia Athletics. Retrieved November 26, 2019. AFC Asian Cup 2027 Bid Book: Bidding Nation Qatar. Qatar Football Association. December 18, 2020. Retrieved...
facilities, airports, and experience of hosting previous major events. Bidding documents were sent to seventeen cities in consideration for hosting a...
selling counterfeit merchandise / bootleg recordings, shill bidding (undisclosed vendor bidding that is used to artificially inflate the price of a certain...
itself. Cline sold the rights to publish the novel in June 2010, in a bidding war to the Crown Publishing Group (a division of Random House). The book...
votes than Riyadh—won the 2034 Games. The following is the timeline of the bidding process for the 2030 Asian Games. Olympic Council of Asia (OCA) sent a...
city's interest in hosting the party's 2024 convention. Milwaukee was also bidding to host the 2024 Republican National Convention. Nashville, Tennessee had...
ViacomCBS announced that it had acquired Some Good News, following a bidding war, with the intention of turning the show into a weekly addition to traditional...
Tom's Hardware. February 19, 2017. Retrieved March 5, 2017. "Magic Leap is bidding on an Army combat contract". seattletimes.com. September 21, 2018. Retrieved...
Kings League transfer window in April 2023 consisted of buyout clauses and bidding options (with the player then choosing) and was held in a one-day live...
are permanently removed from Twitter and Periscope. 7 After an all-out bidding war that included an offer from Lance Bass, the Los Angeles home that was...
2020-06-06. Gleadell, Colin (2020-05-15). "Inside the record-shattering online bidding war between Frieze and Sotheby's". The Telegraph. ISSN 0307-1235. Retrieved...
group chat product, MindAlign. On March 4, 2016, Microsoft had considered bidding $8 billion for Slack, but Bill Gates was against the purchase, stating...
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