The concept of virtual bidding serves as a pure financial tool in electricity markets, aiming at enhancing their performance. Although virtual bidding helps reduce price gaps between different trading floors, there is evidence suggesting that this does not necessarily lead to improved welfare for market consumers. To gain a deeper understanding of virtual bidding and its impact on electricity market prices, this work delves into the strategic behavior of a financial player engaged in an electricity pool-based market. To this end, a bi-level model is formulated. The upper level optimizes the expected revenues of the virtual bidder while the lower-level represents the clearing of the market under network-constrained economic dispatch through a two-stage stochastic programming. The proposed model derives optimal arbitrage strategies in both scenarios of explicit and implicit virtual bidding. It also assesses the performance of virtual bidding under stochastic generation and transmission contingencies, including considerations of up-to-congestion virtual bidding.