re: #185 Nojay UK

From an admittedly brief study of the Griddy business model, it was basically a casino operation. They sold electricity to individual customers based on the spot market price which they gambled would always be under the “retail” price from other suppliers. Along comes a black swan event, the spot market price goes up by three orders of magnitude during shortages and blackouts and a collapse of the grid generators and Griddy doesn’t have any sort of a cushion or forward contracts to limit their exposure so they have to pass on the very high prices to their customers because they’ve contracted to pay the spot market price for the electricity they’re buying to resell.

Basically, if the deal looks too good then this worked example demonstrates why it might not actually be a good idea after all. See also the RobinHood stock trading website and the GameStop debacle of recent weeks.

“we never thought considered that the real market underlying our assumptions would ever change”