Abstarct: Iranian power market has been started for more than 3 years and different parts of it are being completed. One of the aims of this market is encouraging the customers to make bilateral contracts. Customer need to know ATC among different areas to make bilateral contracts. In this thesis a method is proposed for calculating ATC between two areas considering network security constraints and stability margin. To this end, load of the demand area is maximized subject to security constraints. ATC is calculated baxsed on the maximum load of demand area. Then load of the demand area is increased step by step and the derivative of the load versus voltage is calculated. The procedure is continued till the absolute value. In this point we are close to the critical point. In order to keep the load stability margin, the load of demand area must be less than %85 of critical point load. ATC is calculated baxsed on %85 of critical point load. ATC between two areas considering security constraints and stability margin is the minimum of the above mentioned calculated ATCs. Since to calculate critical point the load of the demand area increase, from the max load of demand area considering security constraints, critical point can be calculated with an acceptable speed. The proposed method is applied to a 4 – bus and 8 – bus test systems and the result are analyzed. In order to calculate ATC between different pair areas of Iran network, unnecessary buses should be eliminated to decrease the computation burden. In the normal bus reduction method, the inter area lines are missed and their limits are not clear. Thus determination of ATC is impossible. To overcome this problem a method is proposed for the elimination of buses while keeping the inter area lines. In this method, buses with generators and tie buses are kept and other buses are eliminated. After reducing the Iran network buses, ATC between Mazandaran and Khorasan areas is calculated considering security constraints and voltage stability margin.