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Lot of energy posts popping up and would be happy to help..... few people on the site have a lot of energy exp but lets direct all questions to this post for a few days

Monty09

2

Comments (80)

  • GoodBread's picture

    I guess I'll start.

    1) What distinguishes energy traders from say metals, softs, ags traders? (Personality-wise etc.. the product is obviously different)

    2) Does the product you end up trading end up being luck of the draw? Trading crude sounds great, not to mention lucrative, but it seems impossible to break in without an extraordinary amount of luck. I picked crude because that is probably the most widely discussed, traded and liquid commodity in the world (excluding gold which really isn't applicable to this discussion).

  • monty09's picture

    1. The market can call them what they want and I could care less. Energy Trader is a term most people know and use

    2. In many ways it is the luck of the draw. Depending on needs of business along with your skill set you could end up in a lot of different places. I know one person at my former shop got a trading seat simply because she spoke Spanish. They needed someone asap and she was only one in the group who spoke spanish. She was in a non trading role but moved over to trade

  • Sandhurst's picture

    What is your sense of the relative strengths/weaknesses of a career across different market players? I.e., an oil major, a trading firm (e.g., Trifigura/Vitol/Glencore), or a bank (Morgan Stanley, Goldman, even Citi, etc). My sense is that banks may be more likely to be more into paper than physical, but I also know that's certainly not the case for, say, Morgan Stanley.

    "There are three ways to make a living in this business: be first, be smarter, or cheat."

  • wizpro's picture

    do you think that quantitative finance will eventually take over the physical side as well, just as how it has been widely successful on the paper side for the past decade and a half

  • In reply to Sandhurst
    monty09's picture

    Sandhurst wrote:
    What is your sense of the relative strengths/weaknesses of a career across different market players? I.e., an oil major, a trading firm (e.g., Trifigura/Vitol/Glencore), or a bank (Morgan Stanley, Goldman, even Citi, etc). My sense is that banks may be more likely to be more into paper than physical, but I also know that's certainly not the case for, say, Morgan Stanley.

    all are in the business of making money... when you have offers from each... pick what is best for you at that moment in your life

  • In reply to wizpro
    monty09's picture

    wizpro wrote:
    do you think that quantitative finance will eventually take over the physical side as well, just as how it has been widely successful on the paper side for the past decade and a half

    no

  • In reply to monty09
    Sandhurst's picture

    monty09 wrote:
    Sandhurst wrote:
    What is your sense of the relative strengths/weaknesses of a career across different market players? I.e., an oil major, a trading firm (e.g., Trifigura/Vitol/Glencore), or a bank (Morgan Stanley, Goldman, even Citi, etc). My sense is that banks may be more likely to be more into paper than physical, but I also know that's certainly not the case for, say, Morgan Stanley.

    all are in the business of making money... when you have offers from each... pick what is best for you at that moment in your life

    Okay, fair enough. Which type of environment is more likely to foster/support developing one's trading acumen? Financial considerations and exit opportunities notwithstanding.

    "There are three ways to make a living in this business: be first, be smarter, or cheat."

  • In reply to Sandhurst
    quester's picture

    Which one of the aforementioned environments, if any do you think is typically best at teaching you about how to trade physical? From what I have heard, generally the majors (or more generally, places which are producers as well as traders) are seen as the best breeding grounds because you get to know the details of how a power plant/refinery fits in the trading equation and the general supply chain as they are involved in almost every part of said supply chain which is pretty important for trading.

  • In reply to monty09
    pacman007's picture

    monty09 wrote:
    you do not have exit opts in trading.. your exit opt is to retire or start your own biz

    Can you explain why you think this is the case? Some of these traders who trade physical have a wealth of knowledge about the world, about markets, about the assets of different companies/countries....you would think that the exit opps would be vast and lucrative.

    "Don't quit. Suffer now and live the rest of your life as a Champion" - Muhammad Ali

  • In reply to monty09
    Sandhurst's picture

    monty09 wrote:
    if you are looking for a "path" try corp finance

    Okay. So my question was not about this.. I'm trying to get a sense for what the different players have to offer.

    "There are three ways to make a living in this business: be first, be smarter, or cheat."

  • In reply to monty09
    wizpro's picture

    monty09 wrote:
    wizpro wrote:
    do you think that quantitative finance will eventually take over the physical side as well, just as how it has been widely successful on the paper side for the past decade and a half

    no

    why not?

  • In reply to quester
    monty09's picture

    quester wrote:
    Which one of the aforementioned environments, if any do you think is typically best at teaching you about how to trade physical? From what I have heard, generally the majors (or more generally, places which are producers as well as traders) are seen as the best breeding grounds because you get to know the details of how a power plant/refinery fits in the trading equation and the general supply chain as they are involved in almost every part of said supply chain which is pretty important for trading.

    everyone is different but I started at a bank

  • In reply to wizpro
    monty09's picture

    wizpro wrote:
    monty09 wrote:
    wizpro wrote:
    do you think that quantitative finance will eventually take over the physical side as well, just as how it has been widely successful on the paper side for the past decade and a half

    no

    why not?

    phy side will always be relationship driven

  • In reply to expenseaccounts
    monty09's picture

    expenseaccounts wrote:
    monty09 wrote:
    wizpro wrote:
    monty09 wrote:
    wizpro wrote:
    do you think that quantitative finance will eventually take over the physical side as well, just as how it has been widely successful on the paper side for the past decade and a half

    no

    why not?

    phy side will always be relationship driven

    For a guy who started a thread offering to answer questions, you are quite possibly the least helpful person around.

    So Monty, why will the physical side always be relationship driven? Surely there are a number of instruments about which the same claim was made 15 years ago.

    Looking forward to one more cryptic sentence fragment.

    if you need some help you can search some of my posts dating back to 2007 when I started to talk about energy

  • In reply to pacman007
    monty09's picture

    pacman007 wrote:
    monty09 wrote:
    you do not have exit opts in trading.. your exit opt is to retire or start your own biz

    Can you explain why you think this is the case? Some of these traders who trade physical have a wealth of knowledge about the world, about markets, about the assets of different companies/countries....you would think that the exit opps would be vast and lucrative.

    you have a great deal of exp in a few products and while this is very helpful it is not highly transferable to other industries

  • In reply to quester
    monty09's picture

    quester wrote:
    Which one of the aforementioned environments, if any do you think is typically best at teaching you about how to trade physical? From what I have heard, generally the majors (or more generally, places which are producers as well as traders) are seen as the best breeding grounds because you get to know the details of how a power plant/refinery fits in the trading equation and the general supply chain as they are involved in almost every part of said supply chain which is pretty important for trading.

    day in and day out I cont to be impressed by the traders from BP.... they do a good job training people

  • In reply to expenseaccounts
    monty09's picture

    expenseaccounts wrote:
    monty09 wrote:
    expenseaccounts wrote:
    monty09 wrote:
    wizpro wrote:
    monty09 wrote:
    wizpro wrote:
    do you think that quantitative finance will eventually take over the physical side as well, just as how it has been widely successful on the paper side for the past decade and a half

    no

    why not?

    phy side will always be relationship driven

    For a guy who started a thread offering to answer questions, you are quite possibly the least helpful person around.

    So Monty, why will the physical side always be relationship driven? Surely there are a number of instruments about which the same claim was made 15 years ago.

    Looking forward to one more cryptic sentence fragment.

    if you need some help you can search some of my posts dating back to 2007 when I started to talk about energy

    Awesome. At the level at which you're engaging today, maybe you should just post the link and call it a day.

    What are you doing here if you're not going to answer any questions about the very topic for which you expressly created this thread? These poor kids asking for best training grounds and you telling them to interview for everything and choose the one that's right for their life? Not much help there either.

    not everyone....just you

  • whatwhatwhat's picture

    expenseaccounts, shut the hell up. monty is easily one of the top 5 most helpful posters here and doesn't owe anyone a god damn thing. Not saying to kiss his ass or anything but he answered the question. If you didn't think it was a helpful answer, there are much more constructive ways of asking that might even yield an answer.

  • Linfone's picture

    Hey Monty, you started at a BB as a power analyst for about a year. How did you transition into a power trading role so quickly?

    "All I've ever wanted was an honest week's pay for an honest day's work."

  • In reply to expenseaccounts
    monty09's picture

    expenseaccounts wrote:
    whatwhatwhat wrote:
    expenseaccounts, shut the hell up. monty is easily one of the top 5 most helpful posters here and doesn't owe anyone a god damn thing. Not saying to kiss his ass or anything but he answered the question. If you didn't think it was a helpful answer, there are much more constructive ways of asking that might even yield an answer.

    Hey there, white knight, I don't see Monty not-answering your questions.

    Every poster so far has asked a relatively nuanced question only to get a sentence fragment response. Above I put together just a few examples of people trying to get more information.

    If Monty didn't want to answer questions, then Monty shouldn't have started a thread where he invited people to ask questions.

    haha relax.. some of those questions are honestly not that great.... give me a bit and I will add some color but they are below avg questions... in any respect I will give a crap and provide some color

  • In reply to Linfone
    monty09's picture

    Linfone wrote:
    Hey Monty, you started at a BB as a power analyst for about a year. How did you transition into a power trading role so quickly?

    I asked the head of trading at company x mas party how I could get on a desk.. he said to show him I wanted the job.. so I came in early and stayed late training on the trading desk when I was done with my work... few months later I got a seat

  • In reply to expenseaccounts
    proptrader14's picture

    expenseaccounts wrote:
    whatwhatwhat wrote:
    expenseaccounts, shut the hell up. monty is easily one of the top 5 most helpful posters here and doesn't owe anyone a god damn thing. Not saying to kiss his ass or anything but he answered the question. If you didn't think it was a helpful answer, there are much more constructive ways of asking that might even yield an answer.

    Hey there, white knight, I don't see Monty not-answering your questions.

    Every poster so far has asked a relatively nuanced question only to get a sentence fragment response. Above I put together just a few examples of people trying to get more information.

    If Monty didn't want to answer questions, then Monty shouldn't have started a thread where he invited people to ask questions.

    dude relax. Don't take it personally. Every trader I know answers questions this exact same way. It's definitely different than how most people (including me) talks but if you read his responses he has answered your questions, just in a very short fashion.

    Monty I have a question of my own: do you think alternative energy sources (ethanol for example) will become as heavily traded as current energy commodities (crude, nat. gas, etc)?

  • In reply to monty09
    expenseaccounts's picture

    monty09 wrote:
    expenseaccounts wrote:
    whatwhatwhat wrote:
    expenseaccounts, shut the hell up. monty is easily one of the top 5 most helpful posters here and doesn't owe anyone a god damn thing. Not saying to kiss his ass or anything but he answered the question. If you didn't think it was a helpful answer, there are much more constructive ways of asking that might even yield an answer.

    Hey there, white knight, I don't see Monty not-answering your questions.

    Every poster so far has asked a relatively nuanced question only to get a sentence fragment response. Above I put together just a few examples of people trying to get more information.

    If Monty didn't want to answer questions, then Monty shouldn't have started a thread where he invited people to ask questions.

    haha relax.. some of those questions are honestly not that great.... give me a bit and I will add some color but they are below avg questions... in any respect I will give a crap and provide some color

    I don't take anything personally - I didn't even really ask a question.

    So while you probably won't win audience appreciation points for calling their questions "crap", I appreciate the sentiment - carry on.

  • In reply to proptrader14
    monty09's picture

    proptrader14 wrote:
    expenseaccounts wrote:
    whatwhatwhat wrote:
    expenseaccounts, shut the hell up. monty is easily one of the top 5 most helpful posters here and doesn't owe anyone a god damn thing. Not saying to kiss his ass or anything but he answered the question. If you didn't think it was a helpful answer, there are much more constructive ways of asking that might even yield an answer.

    Hey there, white knight, I don't see Monty not-answering your questions.

    Every poster so far has asked a relatively nuanced question only to get a sentence fragment response. Above I put together just a few examples of people trying to get more information.

    If Monty didn't want to answer questions, then Monty shouldn't have started a thread where he invited people to ask questions.

    dude relax. Don't take it personally. Every trader I know answers questions this exact same way. It's definitely different than how most people (including me) talks but if you read his responses he has answered your questions, just in a very short fashion.

    Monty I have a question of my own: do you think alternative energy sources (ethanol for example) will become as heavily traded as current energy commodities (crude, nat. gas, etc)?

    This very topic was mentioned in the WSJ last tuesday. I do not think ethanol or any of the fuels will ever get the market share in the states as they have in the far east and UK. I think they will give some smaller traded products a run but not nat gas, crude or coal.

  • In reply to Tommy Too-toned
    monty09's picture

    Tommy Too-toned wrote:
    Do you think bankerella will be a widely traded commodity over the next 5 years?

    call me 50@60

  • jimz's picture

    Monty,

    Do you think natural gas prices in the different regions will converge in the next 5 years? Over the past few years the basis market has been eroding with the new pipelines being built. With the exception of AGT which has been on a wild ride this week.

  • ReservoirEng's picture

    Monty,
    I remember you mentioning that you recently left your trading job to start a recruiting and advisory firm. Could you talk a bit about this transition and how things are working out at your new firm?

    Also, anything new about next years energy rodeo that you can share?
    Thanks

  • jimz's picture

    Also, do you think John Arnold will ever come back

  • In reply to jimz
    wallstreetballa's picture

    jimz wrote:
    Also, do you think John Arnold will ever come back

    Bump

  • In reply to jimz
    wallstreetballa's picture

    jimz wrote:
    Also, do you think John Arnold will ever come back

    Bump

  • slim_ibd_shady's picture

    just wanted to drop in on this thread as i saw this on the front page along with a few bumpers..

    excuse my ignorance that i know nothing about trading and am just calling out for question out of a wild gate.

    How thin is the line between trading and gambling? Do you take other people's money to trade? And you make commissions off of trades regardless of wins or losses to clients?

  • slim_ibd_shady's picture

    I guess I do have one more question for an energy pro like monty99

    How does one break into the energy industry, especially when you are not from Texas?

    Do you have to study majors like petroleum engineering? If a business or finance background, how can get you noticed and break into the field if you did not go to a target school?

  • In reply to expenseaccounts
    Going Concern's picture

    expenseaccounts wrote:
    monty09 wrote:
    expenseaccounts wrote:
    monty09 wrote:
    wizpro wrote:
    monty09 wrote:
    wizpro wrote:
    do you think that quantitative finance will eventually take over the physical side as well, just as how it has been widely successful on the paper side for the past decade and a half

    no

    why not?

    phy side will always be relationship driven

    For a guy who started a thread offering to answer questions, you are quite possibly the least helpful person around.

    So Monty, why will the physical side always be relationship driven? Surely there are a number of instruments about which the same claim was made 15 years ago.

    Looking forward to one more cryptic sentence fragment.

    if you need some help you can search some of my posts dating back to 2007 when I started to talk about energy

    Awesome. At the level at which you're engaging today, maybe you should just post the link and call it a day.

    What are you doing here if you're not going to answer any questions about the very topic for which you expressly created this thread? These poor kids asking for best training grounds and you telling them to interview for everything and choose the one that's right for their life? Not much help there either.

    hahahaha...so far it looks like this Q&A thread misses the mark by a mile..."search my prior posts if you want help"...LOL! A question is partially a springboard towards the speaker having a topic on which to start the discussion and try to provide some new insight. Don't see that happening here. Might as well be talking to Siri when she's too tired to type sentences, haha.

    “A deception that elevates us is dearer than a host of low truths”

  • pacman007's picture

    Monty has been very helpful.. Every time I've reached out to Monty he has responded quickly with very helpful answers.

    "Don't quit. Suffer now and live the rest of your life as a Champion" - Muhammad Ali

  • In reply to pacman007
    Going Concern's picture

    pacman007 wrote:
    Monty has been very helpful.. Every time I've reached out to Monty he has responded quickly with very helpful answers.

    I'm not necessarily saying he hasn't been helpful in the past to some people or isn't capable of providing helpful answers in his field. I'm just pointing out that this particular thread doesn't look helpful at all, at least so far. And it doesn't seem like it has much to do with the questions themselves.

    “A deception that elevates us is dearer than a host of low truths”

  • RaiderHelp's picture

    This is perfect! My question is: Would you suggest getting my degree in Energy Commerce, or Finance? I've received mixed results. Some say E Comm leads to being a landman and such, others say its a good move. (I'm still a freshmen, so have some time to decide).

    Your thoughts?
    Thanks!

  • In reply to Going Concern
    farmerbob's picture

    Going Concern wrote:

    hahahaha...so far it looks like this Q&A thread misses the mark by a mile..."search my prior posts if you want help"...LOL! A question is partially a springboard towards the speaker having a topic on which to start the discussion and try to provide some new insight. Don't see that happening here. Might as well be talking to Siri when she's too tired to type sentences, haha.

    I agree completely with what has been said here. Both Going Concern and expenseaccounts are dead on here. I have read Monty's posts in the past and he has given a lot of info. In fact he has given the best energy trading info on WSO in many previous posts much like what this one was supposed to be.

    More recently, however, he has given some of the least helpful info. I don't even know why he responds if he isn't gonna answer the questions. Example outside of this thread: I posted a thread about what Mercuria's email structure in which I guessed a couple of structures. Monty was the first to reply with the ever so helpful comment of, "its not that format" without so much as answering my question.

    Monty has been great in the past but is seriously lacking as of late. Again, not saying he owes anyone anything, just that he doesn't need to respond if he isn't gonna add value. If you are gonna offer your knowledge, offer it, else don't.

  • In reply to monty09
    16rl's picture

    monty09 wrote:
    expenseaccounts wrote:
    monty09 wrote:
    wizpro wrote:
    monty09 wrote:
    wizpro wrote:
    do you think that quantitative finance will eventually take over the physical side as well, just as how it has been widely successful on the paper side for the past decade and a half

    no

    why not?

    phy side will always be relationship driven

    For a guy who started a thread offering to answer questions, you are quite possibly the least helpful person around.

    So Monty, why will the physical side always be relationship driven? Surely there are a number of instruments about which the same claim was made 15 years ago.

    Looking forward to one more cryptic sentence fragment.

    if you need some help you can search some of my posts dating back to 2007 when I started to talk about energy

    I’ll try and elaborate why bots won’t make it to the physical markets with my limited knowledge. To all the people working in the industry: please correct me if I made a major mistake, but I’m pretty sure this is correct.

    As monty said, such markets tend to be relationship driven. Why? Well, we are trading physical assets here, which require capital intensive, low-margin/high volume business models. This means high barriers to entry; and when there are high barriers to entry, people tend to know each other.

    Currently, the only place where bots will take over is on the paper markets on commodity derivatives. Physical commodity firms use paper markets, but mostly for hedging and risk management purposes. I will try to illustrate with an extreme example:

    Mr Smith (commodity trader) does a secret deal with Mr Bob (farmer cooperative representative) to buy 100.000 tons of commodities at $165 a ton. Mr Smith is a large global player and has the logistical and financial means to do such transaction. World prices are at $175 a ton. Mr Bob is selling due to oversupply of a perishable item (food) and a reduced timeframe to sell the goods. (Bob stores all his commodities at a place close to a river which freezes during winter; he is pretty much fucked if he doesn’t sell in time, so he sells at a heavy discount.) Mr Smith goes on a buying rampage and gets it all. In order to reduce his risk, he sells 100.000 tons worth of futures, just in case market prices drop and he gets squeezed out. Mr Smith then organizes all the logistics to carry 100.000 tons worth of goods (probably via barge first, them with a handysize type of ship later) and dispatches them where he knows there will be demand. In this scenario, Mr Smith just made a killing ($10 a ton) and was able to manage his risk. Mr Bob, although selling bellow world market prices (and somehow depressing market prices by doing so) is sort-of happy because he sold his grain and did not end up with 100.000 tons worth of rotten food.

    Bots are currently not capable of understanding such transaction, event less to take advantage of it. They are only able to thrive in environments where everything can be reduced to a simple formula. If bots would be ruling the physical commodities markets, they would have to understand global inventories, the availability of ships, if such ships are able to go on a specific waterway, arrange all the paperwork (good luck with that), understand weather precipitation patterns and so on... I hope you understand that physical markets are very different from paper markets now!

    PS: I am seeking an internship in a commodities firm in operations. Global availability. PM me.

  • In reply to 16rl
    eurokopek's picture

    @16rl I think a better example is that no model can predict which winter Putin decides Europe is going to freeze.

  • GoodBread's picture

    Hiring seems to be getting incredibly competitive at the entry-level. Stuff like real-time trading in the US now requires you to have prior experience and at EDFT in London, scheduler positions require you to have worked in Contracts, for which there seem to be no job postings. How do you get this initial experience?

  • ebs0521's picture

    Monty, hope everything has been going well since you left the desk. Couple questions for you...
    - What are your thoughts on FERC considering to require power traders to be licensed? I guess with all of the market manipulation investigations currently going on, they're trying to get certain individuals out of the industry.
    - If you were to make a lateral move, would you shy away from power desks at the big banks due to uncertainty of dodd frank outcome and go to a trading firm like edf/cargill/const/etc? If not, why?

  • In reply to jimz
    monty09's picture

    jimz wrote:
    Monty,

    Do you think natural gas prices in the different regions will converge in the next 5 years? Over the past few years the basis market has been eroding with the new pipelines being built. With the exception of AGT which has been on a wild ride this week.

    lot of people are thinking nat gas will came back in a big way inside of the next 2-3 years..... it has been flat for the most part last 2 years and while it has taken a run every few months... nothing to go crazy about.

  • In reply to ReservoirEng
    monty09's picture

    ReservoirEng wrote:
    Monty,
    I remember you mentioning that you recently left your trading job to start a recruiting and advisory firm. Could you talk a bit about this transition and how things are working out at your new firm?

    Also, anything new about next years energy rodeo that you can share?
    Thanks

    Things are going very well and the transition was not that bad at all. We are hiring a lot and entering new markets. I honestly feel like more of a phy trader now then when I was on a desk

    energy rodeo is open to sign up and free for 2013

    www.energyrodeo.com

  • In reply to jimz
    monty09's picture

    jimz wrote:
    Also, do you think John Arnold will ever come back

    saw john saturday and pretty safe bet he will not open another fund.. he is however still vested in the market... his focus right now is on education reform

  • In reply to slim_ibd_shady
    monty09's picture

    slim_ibd_shady wrote:
    just wanted to drop in on this thread as i saw this on the front page along with a few bumpers..

    excuse my ignorance that i know nothing about trading and am just calling out for question out of a wild gate.

    How thin is the line between trading and gambling? Do you take other people's money to trade? And you make commissions off of trades regardless of wins or losses to clients?

    the line is closer some days but it all depends. You def take a view of the market and back it with some $$... traders do not make commissions...brokers do....

  • In reply to slim_ibd_shady
    monty09's picture

    slim_ibd_shady wrote:
    I guess I do have one more question for an energy pro like monty99

    How does one break into the energy industry, especially when you are not from Texas?

    Do you have to study majors like petroleum engineering? If a business or finance background, how can get you noticed and break into the field if you did not go to a target school?

    1. it helps if you get my name right
    2. easy route is to do well in school and try to get in via an internship. however, houston is a larger market but def not the only one. you can find good jobs in the energy market all over the US
    3. You will see finance, accounting and economics as the 3 biggest majors but good smart people always get in as well

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