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 1980s: Trading futures
 How Enron took a bet on energy

Kenneth Lay had been anxious to expand the business right from the word go.

Jeff Skilling, an ambitious thinker from the world famous consultancy firm McKinsey, offered a way to do it.

Skilling believed that Enron could profit from trading futures in gas contracts between suppliers and consumers - effectively betting against future movements in the price of gas-generated energy.

Buyers and sellers use futures markets to get what they hope will be a better deal on commodity prices than they would do on the open market.

Enron offered to do the same with gas by buying and selling tomorrow's gas at a fixed price today.

In the deregulated energy world, it appeared to make sense to many suppliers and industry consumers who took up the offer. The new Enron was emerging.

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