When energy merchants began exiting their trading businesses after Enron imploded five years ago, some investment banks saw an opportunity to assume trading positions that energy companies' balance sheets could no longer support. But trading barrels, megawatts and decatherms is not quite the same as trading stocks, bonds and mutual funds. So before jumping in, financial investors need to conduct thorough diligence on a target's trading book in order to fully assess the unique risks this market presents.
