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Thanks for clarifying. Just to make sure I'm following then--the system was essentially looking at the bid price for just the first hour, and ignoring hours tw

Thanks for clarifying. Just to make sure I'm following then--the system was essentially looking at the bid price for just the first hour, and ignoring hours two and three despite the fact that time needed to be sold in three hour commitments due to the boot up time, which let JPMorgan jack bids two and three up and have them automatically accepted since the bids for hours two and three were never considered in the bid selection logic? If so that's one major oversight for whomever built the system. I honestly could see why JPMorgan would be going "so...you're sure these are the rules? Really? Mmmm...ok....well, if you say so." I'm sure they didn't exactly telegraph how they would abuse this, but I find it a bit hard to hold them responsible for what is essentially negligence on the behalf of whomever was in charge of designing the system logic.

ikeboy 11y ago
Legally, they seem to have lied at one point when asked, and anyway this is a settlement which doesn't mean their actions were found illegal. I'm not sure if it's the previous two hours or the next two hours, but either way yields the same result. Also, they may not be doing 3 hour increments, but just having a buffer time. I only know what the article says. Whoever built the system probably assumed that bids represented people's actual intentions, and tried to get the cheapest power given the inputs. They missed a loophole, yes. Note that there are other strategies that did similar but different things.
ikeboy 11y ago
There's also >As set forth below, Enforcement has determined that, through the 12 strategies investigated here, JPMVEC violated the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2, by intentionally submitting bids to CAISO and MISO that falsely appeared economic to CAISO and MISO’s market software but that were intended to, and in almost all cases did, lead CAISO and MISO to pay JPMVEC at rates far above market prices. http://ferc.gov/EventCalendar/Files/20130730080931-IN11-8-000.pdf http://ferc.gov/EventCalendar/Files/20130730080931-IN11-8-00...

ikeboy 11y ago

Legally, they seem to have lied at one point when asked, and anyway this is a settlement which doesn't mean their actions were found illegal. I'm not sure if it's the previous two hours or the next two hours, but either way yields the same result. Also, they may not be doing 3 hour increments, but just having a buffer time. I only know what the article says. Whoever built the system probably assumed that bids represented people's actual intentions, and tried to get the cheapest power given the inputs. They missed a loophole, yes. Note that there are other strategies that did similar but different things.

ikeboy 11y ago

There's also >As set forth below, Enforcement has determined that, through the 12 strategies investigated here, JPMVEC violated the Commission’s Anti-Manipulation Rule, 18 C.F.R. § 1c.2, by intentionally submitting bids to CAISO and MISO that falsely appeared economic to CAISO and MISO’s market software but that were intended to, and in almost all cases did, lead CAISO and MISO to pay JPMVEC at rates far above market prices. http://ferc.gov/EventCalendar/Files/20130730080931-IN11-8-000.pdf http://ferc.gov/EventCalendar/Files/20130730080931-IN11-8-00...