Energy markets are managed and traded through a set of financial instruments, and this lesson explains the main ones and what each is for. We cover futures, options, and swaps, the building blocks, then the energy-specific spreads (the spark and dark spreads) that express the economics of a power plant as a single tradeable number, and finally the structured products that combine the basics into tailored hedges. We build each on a worked example so you can see the payoff, not just the definition. This lesson is foundational for the rest of energy trading, since these instruments are how every participant, producer, consumer, or trader, manages price risk and takes a view. For the deeper theory of how derivatives are priced, the Derivatives course is the companion to this lesson.
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