Trading at Oil Company vs. Bank

depends what side you are looking to trade. energy companies will be more physical focused while i banks have both fin and phy

Idealy, I'd like to end up doing more spec/proprietary trading, though I'm new to the industry and am open to either at this point. Something I'm putting a lot of weight on is the likelihood of getting a FT offer upon completion sine I graduate at the end of the upcoming fall semester. I do know that the program at the energy company would almost definitly lead to FT placement.

I've also heard some conflicting reports about the typical length of stay, opportunity for advancement and salaries/bonuses for traders from energy co's vs. banks. Specifically, consensus is that banks don't tend to keep you around very long whereas the energy co's do. On the other hand, even if that were the case, having a few years at a BB would probably be great as leverage for other spots, though I'd think that a stint at any major energy company would be too. Is it atypical in this field to just stick with your first employer and make a career with them?

In energy it is typical to switch firms every two years. I am currently at a bank. I think working in either place is good as long as you have the opportunity to get into prop trading. Once you are an actual trader, it only matters how good you are. One thing to consider is that with the banks in trouble and losing a lot of money you may want to stay away from them and work at more profitable energy companies. Even though energy trading departments may be profitable, pay will be down as the bonus pool is dispersed to all units, even units that lose money.

"the superstars always trade physical first" -- MD at Constellation

From what I have heard banks will pay a trader 10% while the energy companies normally pay between 4-6%. I am unsure about base salary at energy companies. At the junior level I would not be concerned about the base/bonus structure. I would care about the quality of the training and exit opps. Not sure how all the energy companies work but Conoco's program is first you do fundamentals and then scheduling (at least for Natural Gas). I think BP's is a little different in that you are placed on a desk and basically are responsible for fundamentals and clerking (again for Natural Gas). It all depends on what you want to do and what product you like/get placed into. Do you want to be a physical trader or a financial trader? Physical guys I feel meet with clients more and are always trying to get long term deals from utilities. They specialize in optimizing physical assets. They still take financial positions, but more for hedging purposes. Financial guys pay very close attention to the physical markets except they generally take basis positions or location spreads instead of optimizing storage or transport for a utility. Trading is musical chairs all the senior traders I work with have been at a bunch of companies and all know each other because they worked at a bank/utility/energy firm/hf together at some point. Sorry for the rant, but do not focus on how much you will make your first two years out of school. Find a company that will teach you a product and a market and let you trade. Once you are trading you can always leave for another company that offers a better salary and a bigger cut of your book's profits.

everyone uses a different mix to comp their trade teams. Some use a mix of group pnl, ind pnl, firm perf etc. Some use a % of base and others use different things.

I will say that the bigger the firm the more training you may recieve as opposed to a small marketer but that will come with a risk/reward factor as you may get to wear more hats at a smaller firm vs a larger shop.

At end of day what will provide the best learning exp for you. I started at a large shop and now at a smaller shop. I loved both for different reasons.

Depends on which books you manage also, your comp reflects that.

that said, starting out at an oil company is very insightful - you will be dealing with refiners when you move on and it's a plus to know things from their perspective, among other things.

Its a good idea but starting the oil company is not a small thing for that you have to deal with so many people and the oil companies that are present now.I know a oil company that helps the people in there business. For more information visit : http://www.lincenergy.us

how much do the payouts at energy firms for senior traders equate to in terms of dollars? e.g is a trader of 5 or 6 years pulling in 150k or nearer 400k+ as they may be at a bank?

I get the sense that once you are in the drivers seat, trading at an energy/oil company pays quite well too. Not quite as well as a bank (except for top performers prob); given the movement of traders to banks from energy cos this must be the case. The real question is will banks continue to pay their energy traders like they have been while the rest of the firm may be struggling or facing tighter regulations. If they don't they risk being in the same spot the the oil companies have been in the past few years and losing talent back to the oil companies.

trading at a bank and at oil companies are quite different.

wxonwallsteet,

trading at either pay well if you are good. The head of all the major energy/oil where at bb's less then 5 years ago... where were they before that? an energy/oil company..

bear/jp - calpine lehman- dynegy

when it is the flavor of the month anyone can pay well.