Sep 01, 2026

Q&A: US Power Trader (Prop/HF)

Hey WSO, 5y into my career and currently on garden leave after a 3y+ stint at a US power shop. Hoping to give a little bit of insight into the industry as others on here did for me a few years back. Most of my experience is in DA/RT (INC/DEC, PTP/UTC) and FTRs, along with cash & term on ICE. Feel free to ask (almost) anything, obviously some specifics I can't get into but DITL, career progression, comp, general view on the industry/market right now is all fair game.

8 Comments

WSO Monkey Bot

Based on the most helpful WSO content, here are some insights and advice for your Q&A:

Day in the Life (DITL):
- Power trading, especially in DA/RT (Day-Ahead/Real-Time) markets, involves a mix of model-driven decision-making and real-time adjustments. Traders often rely on forecasts, marginal cost calculations, and live data to predict auction clearances and optimize bids.
- A significant part of the role includes analyzing weather patterns, grid congestion, and market dynamics to identify profitable opportunities in INC/DEC, PTP/UTC, and FTRs.
Career Progression:
- Many power traders start in support roles, such as scheduling or analytics, to build a strong foundation in market mechanics and transmission systems.
- Progression often depends on demonstrating P&L contributions, understanding complex systems like FTRs, and networking within the industry.
- Transitioning to higher roles or different firms may require a solid track record and strong references, especially from PMs or senior traders.
Compensation:
- Compensation in power trading can be lucrative, especially at hedge funds or proprietary trading firms. First-year earnings of $350k+ are not uncommon for successful traders, with potential for significant upside based on performance.
Industry/Market View:
- The power trading market is dynamic, with significant shifts driven by renewable energy integration, grid congestion, and regulatory changes.
- Traders need to stay updated on trends like the "duck curve," renewable intermittency, and evolving carbon pricing mechanisms, particularly in regions like the EU and US.
Advice for Aspiring Traders:
- Develop a strong understanding of the transmission system and market rules. Attending conferences or specialized training on FTRs and power markets can be invaluable.
- Build programming and modeling skills to enhance decision-making and efficiency in trading strategies.
- Networking is crucial—leverage LinkedIn, industry events, and recruiters to explore opportunities and gain insights.

If you have specific questions about any of these areas, feel free to ask!

Sources: Q&A: Director of Energy Trading, energy trader, do I move?, Physical Trading: Best commodities to be in?, Trading Power, Carbon & NGOs

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wuandale33

23h

Did you work at a utility before hopping to a hedge fund ?

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Quant in PropTrad

14h

I worked at a research firm before I got my first trading seat, but I've had a number of colleagues over the years who came from utilities/asset owners. The path of RT -> DA/RT -> Cash -> Term still holds true for a lot of traders, especially those who choose to go the utility/asset owner route, but for speculative trading I've found that more and more shops are hiring out of grad/undergrad, especially those who lean on the quant side.

It's a pretty small sample size, but I've noticed that those making the jump from trading around an asset to trading pure spec struggle more than someone starting fresh, just incredibly different trading styles.

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Economic Inequality In America 2022

wuandale33

Research firm as in like wood mackenzie ??????

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Investment Analyst in S&T - Other

Thanks for doing this

Are you Easter/West/AECO or ERCOT?
Have you done physical? How much does it help?
How are batteries affecting you?
How import is knowing congestion for term trading?
how do you think about data center demand materialization?
have you seen more spec players in term/cash markets? european guys seem to be waddling in
how much regulatory stuff do you pay attention to?
your thoughts on SMRs?

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Authored by: Certified Sales & Trading Professional - Investment AnalystCertified Sales & Trading Pro

Quant in PropTrad

Most Helpful

I traded both East and ERCOT in my career. Right now East is my favorite, just so much opportunity across the markets. I'm really excited for some of the developments in the West, particularly whatever "West RTO" pops up in the next 3-5y.
Haven't traded physical. From talking with coworkers who have traded physical I do think it gives you a different perspective on price formation and interchange flow in RT, which can be incredibly impactful at times. However, not having physical experience doesn't disqualify one from being an incredibly strong trader.
I think the "price shaving" effect of batteries is a bit over-hyped. At the end of the day, these are still incredibly capital intensive projects that demand strong return on investment, and this shows in how they're offering into the market. On the average day you might see decent battery penetration, but the last X% of the battery stack is still priced like a peaker and really doesn't change scarcity pricing that much compared with gas units.
Really depends on the type of trading. There are definitely funds out there with minimal congestion understanding that are still quite profitable in the term space, but if you're a basis trader then obviously congestion is going to be important. Overall, congestion is likely not going to make or break a term trading career.
In general I think power has seen a pretty large inflow of capital over the last 5-10y, and another massive inflow of participants during this AI boom. We've seen Google, Meta, and now OpenAI all hiring "Power Traders" to hedge their term exposure/variable exposure (during training vs during inference).
On the DA/RT side (and even cash to some extent) , you can get away with paying a little bit less attention to regulatory changes. However with FTRs and Term regulation can have a massive impact, and I know of some traders who's focus is on the regulatory side and how that affects price formation. More recently with the surge of load build-out, regulatory changes are becoming more and more important.
Personally, all for them. Why we ever decommissioned NUCs is beyond me.
From a trader's POV, this has basically no impact. Base-load gen is always going to be at the bottom of the stack and will basically never set price, so worst case scenario is this shifts the curve to the left, we see less volatility for a bit until older coal/nat-gas units are retired and we see volatility a bit more.
From an economics perspective, I don't see these being cost-effective for at least another 5-10y. The first batch are going to be subsidized by VCs and are essentially proof-of-concepts. The next batch will hit the headwinds of NIMBYs and are still likely less cost-effective than just securing a firm contract.

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LastFrontier

What’s your opinion of being at a utility long-term? I’ve heard mixed opinions.

What’s your view on trading on the West Coast, specifically the Pacific Northwest?

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Authored by: Certified Real Estate Professional - Vice PresidentCertified Real Estate Pro

Quant in PropTrad

47m

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Q&A: US Power Trader (Prop/HF)

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Q&A: US Power Trader (Prop/HF)

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