S&T for Energy Rankings

This is just hearsay...but Ive heard that first year analysts at JPM energy group received 120k bonus. Some were even promoted to associate after 1st year. Heard from a contact at the bank.

Say it isn't so Kasanova. Well we all know energy is an extreme. Either good or bad. Last 3yrs has been GREAT for anyone trading energy!! What do you guys think about the future of energy trading considering the fact that the product itself may go through various changes and also the geo-political factors that will surely affect the market within the next 10yrs?

Well, I'm definitely no expert, but the money is definitely on the commodities side. In terms of traditional energy investment banking, I think the industry will continue to grow as technology improves and alternative sources of energy become more available. On the trading side, energy is just so damn volatile. There are so many things that affect the energy markets-you have to have a huge appetite for risk, moreso than most other trading groups. I knew traders that were on edge every second of the day and after they had left for the day because they never knew what would happen with their positions.

I can't confirm the bonus numbers for analysts and associates there. I know that they made a boat load of money after the Amaranth cataclysm-so I wouldn't necessarily bet on those numbers being steady(if they are even true).

I'd say a general ranking of S&T firms is: Goldman first, then Lehman and Deutsche Bank in no particular order. The other firms (JPM, MS, UBS, Citi, etc.) are all somewhat comparable..strong in some areas but weak in others.

For commodities, the best two firms are unquestionably Goldman and Morgan Stanley.

There's certainly not a huge drop off after GS/MS for trading overall..perhaps after GS there is since GS is amazing at trading. I wouldn't expect to hear any trader tell you that MS is the top or second best trading firm..except those traders that work at MS. My friend interviewed at MS and said they did a great job of making the decision seem as though it should be between MS and GS if one is lucky enough to receive offers at both...I'd say the decision should easily be GS if you're lucky enough to get an offer there, and then Lehman or DB.

Goldman is tops in virtually every area of fixed income and equities trading, but the other firms have their specilities. Overall, though, Lehman and Deutsche are the next best. Lehman is very strong in securitized products while Deutsche is very strong in derivitives, but they're both strong in most other areas as well.

"Goldman is tops in virtually every area of fixed income and equities trading"

this is too broad of a statement. GS is great shop obviously but their are a lot of banks that are stronger than them in particular areas. i would say they are tops in many areas....virtually every area is a bit much

Honestly, it may be somewhat bank dependant, but at my bank Commodities is really quant. I'm on the sales side and we are far and away the most quant sales desk I have ever seen. The thing with commodities is that even the most basis products you deal with are derivatives--forwards/swaps and options. And a large chunck of the work deals with structured products. It also depends on the underlying. Power is much more quant than the rest of the energy products, to the point where even basic options and swaps can take days to price because each deal is entirely bespoke. So on the power side really everything is "structured". Another issue is that you not only need to learn finance concepts, but you also need to know a great deal about the underlying industry. Probably much morer so than on any other desk. On commodities you need to know the ins and outs of power plants, nuclear reactions, weather patterns, etc. So a very steep learning curve and very quant. But if you're interested in energy then go for it anyway. Equities suck, let's be honest. Cash equities is a dying field on the trading floor. If you want to follow the industry you really have 3 choices: 1) work in the industry, 2) work in finance, in Commodities Sales, Trading & Structuring, or 3) work in finance on an energy IBD team. S&T is the most quant of the three, but also will give you far and away the best chance to make the most money.

Equity derivatives is a great field. It's regular cash equities that sucks. The reason is that there is zero intellectual stimulation. There is no need for a person to trade equities--a computer can do it better. Cash equities has been "commoditized" as people say, so you can't really make a living anymore just making the bid-ask spread on cash equities. Those desks on trading floors are getting smaller and smaller, and the people who are still doing it are constantly worrying about losing their jobs. Cash equities at a major bank is only a small step removed from the guys on the floor of the NYSE. I'd say do equity derivatives, or go to a hedge fund. But equities at a sell-side bank is not something I'd recommend starting a career in. But, just my opinion, so be sure to research it as much as you can and try to go visit some trading floors. Then you'll really see the difference btw the cash equities guys and the FI/FX/Commodities side of the house.