6/18/10

Do you guys know what US power trading is? It's under commodities desks, but I'm not sure what exact commodities they trade.(ex. natural gas) Do they trade other assets like equities and bonds too??

Comments (16)

6/18/10

watch "Smartest Guys in the Room" to get an idea of what Enron power traders did

looking for that pick-me-up to power through an all-nighter?
http://www.jasonbondpicks.com
6/18/10

afterwards look up "Death Star Strategy"

6/18/10

I would not watch Enron videos, that was the golden era of power trading. Now days I think comp ranges from 150-300.

6/18/10

US Power Trading ( hopefully they have a physical presence...if not then it's a clown factory ):

Usually firms will own peaker plants or have operational rights to base load power plants in various ISO zones ( ERCOT, CAISO, PJM, MISO being the most popular b/c they're deregulated unlike SERC which is a relic from the 1950s ). Using that firms are able to get information on how power is flowing across the various grids ( ie where power is congested - very important, you may have rights to power being produced in ERCOT West but b/c of congestion you'll never get it over to Dallas/Houston ; or where demand is etc..., or if a power plant has tripped )

Using that information they can trade real-time power, or engaged in structured deals with clients who want to hedge against changes in fuel prices or power demand.

Most power desks will have a weather team, as you need it to figure out how much power demand is going to change b/c of temp. Enron made lots of money b/c California is kind of stupid and draws all their power from coal plants in Utah, or from the NW, so Enron just bought tons of options and then shut down their plants. Now days that's illegal, so no more big bucks. Also, CAISO can just declare that volatile movements in power prices were a technical glitch and reset value at which trades actually occurred...so trading in CAISO actually blows.

6/18/10
EnteringRealLife:

US Power Trading ( hopefully they have a physical presence...if not then it's a clown factory ):

Usually firms will own peaker plants or have operational rights to base load power plants in various ISO zones ( ERCOT, CAISO, PJM, MISO being the most popular b/c they're deregulated unlike SERC which is a relic from the 1950s ). Using that firms are able to get information on how power is flowing across the various grids ( ie where power is congested - very important, you may have rights to power being produced in ERCOT West but b/c of congestion you'll never get it over to Dallas/Houston ; or where demand is etc..., or if a power plant has tripped )

Using that information they can trade real-time power, or engaged in structured deals with clients who want to hedge against changes in fuel prices or power demand.

Most power desks will have a weather team, as you need it to figure out how much power demand is going to change b/c of temp. Enron made lots of money b/c California is kind of stupid and draws all their power from coal plants in Utah, or from the NW, so Enron just bought tons of options and then shut down their plants. Now days that's illegal, so no more big bucks. Also, CAISO can just declare that volatile movements in power prices were a technical glitch and reset value at which trades actually occurred...so trading in CAISO actually blows.

+1

I am a power trader and agree... working with the enron guys is actually like a smart history lesson...

6/19/10

Who are some of the big power players? Do Vitol, Trafigura, etc all have power desks also?

6/19/10
EarTotheStreet:

Who are some of the big power players? Do Vitol, Trafigura, etc all have power desks also?

phy or fin?

Vitol does. Traf does not

6/19/10

MS, JPM, GS, Citi, the utilities, one oil company at some point did

I'm very curious as to what happens at those places if/when Volcker kicks in. Real-Time is pure prop? right....

6/19/10
EnteringRealLife:

MS, JPM, GS, Citi, the utilities, one oil company at some point did

I'm very curious as to what happens at those places if/when Volcker kicks in. Real-Time is pure prop? right....

your list is incorrect. He asked for power players not firms that trade power.

MSCG - does a lot of biz in Midwest and NE
JP- picked up bear book who came from calpine so very focused in west but does a lot of biz in east too.
GS- does a lot of biz in NE
Citi- does not do much on phy side

are are fin focused but the above is what they do in phy . I would say JP is best mix of both followed by MSCG only in terms of banks

Calp, Southern, AEP, Exelon would be the biggest players in size however does not mean they are making most money or anything like that...

Vitol only trades fin power

6/19/10
monty09:
EnteringRealLife:

MS, JPM, GS, Citi, the utilities, one oil company at some point did

I'm very curious as to what happens at those places if/when Volcker kicks in. Real-Time is pure prop? right....

your list is incorrect. He asked for power players not firms that trade power.

MSCG - does a lot of biz in Midwest and NE
JP- picked up bear book who came from calpine so very focused in west but does a lot of biz in east too.
GS- does a lot of biz in NE
Citi- does not do much on phy side

are are fin focused but the above is what they do in phy . I would say JP is best mix of both followed by MSCG only in terms of banks

Calp, Southern, AEP, Exelon would be the biggest players in size however does not mean they are making most money or anything like that...

Vitol only trades fin power

real time is not only prop. If you have gen rights or managing gen load you have that aspect as well.

6/19/10

Like monty said, MSCG has large Northeast and Midwest books and they're pretty hell bent in expanding their West presence. The Vancouver office should help in that regards.

Anyone have a stint trading power real-time? I understand the hours can ridiculous, but depending on the group/rotation, you're looking at up to a week off after pulling the late shift.

6/20/10
Shake:

Like monty said, MSCG has large Northeast and Midwest books and they're pretty hell bent in expanding their West presence. The Vancouver office should help in that regards.

Anyone have a stint trading power real-time? I understand the hours can ridiculous, but depending on the group/rotation, you're looking at up to a week off after pulling the late shift.

I did some real time and only working 12 days a month is pretty nice. Try catching a movie at noon on a tuesday or tee off at 9 am on a monday. Do your year to two and move on out

5/8/13

can you elaborate on the details of the schedule? how do you only work 12 days a month?

so 3 days a week, 12 hour shifts?

5/10/13

Valuestrat920:

can you elaborate on the details of the schedule? how do you only work 12 days a month?

so 3 days a week, 12 hour shifts?

Just started in RT power ops and i can assure you that we work much more at my firm. On a monthly,basis we would have about 5 to 7 day shifts (6:00-18:00), 5 to 7 night shifts (18:00-06:00) and about 5 days of normal office hours (but most of us come in at 7am in the morning anyways). "Only" the rest would be vacation.

Its tough, but you get to learn a lot and its cool to work in parallel with the traders

6/19/10

monty has traded some real-time. I know a few guys who did here, you can get more than a week off depending on the rotation as you said. It requires a certain type of person to adapt and enjoy that lifestyle.

MSCG is trading US west power out of Vancouver, thats bit odd but works I guess as long as they get the right licensing. Vancouver like San Deigo is prolly one of the nicer cities to trade energy I bet (as long as you dont mind getting in at 4am that is).

11/7/10
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