How would I hedge against a future fall in electricity prices?

Question

Are electricity futures or (related index) traded? Where?

How long is the typical contract?

Answer 1

You could either short-sell electricity futures or buy put options on electricity futures.

You may want to read CBOT Electricity Futures Reference Manual:

http://www.cbot.com/cbot/docs/876.pdf

Answer 2

options - you would use options in order to hedle.

A Put, is an option that gives you the right to sell at a future date at todays prices. So, if prices fall and you use the put, you can buy at the cheaper price and sell at todays price.

Unless you are an electricity producer though im not sure why you would want to or if it is even possible as i dont think electricity is traded on the futures market