Ask questions to an oil trader

Put your questions to a trainee oil trader at BP
Susan Glover joined the Trader Development Programme (TDP) at BP in September 2006. She studied a BSc in biology at St. Andrews University, followed by a graduate diploma in Law at the College of Law and a Graduate Diploma in Finance at the LSE.
Susan will be answering your questions on what its like to work as a trainee oil trader.
We’ve started the process by asking her a few questions below. Please post your questions in the comments box at the bottom of this page. Susan will be answering three a day between the 8th and 10th November inclusive. Only answered questions will be made live. QUESTIONS ARE NOW CLOSED.

1. What made you decide to be a commodities trader, and why at BP?
Having decided that I wanted a career in commodities trading, I joined BP because I was impressed with the IST [Integrated Supply and Trading] graduate programme and what it had to offer. IST brings together the trading activities of BP in the oil, gas, energy, chemicals, finance and shipping markets, so BP operates the programme on 3 one-year rotations. I went to a careers fair and took part in a trading game at the LSE – at both I talked to traders and got a good sense of what they did and what life was like within IST. This also played a part in my decision to join.

2. Do you feel your university studies prepared you for your career?
The statistics and analytics in my science and finance degrees and a foundation in contract law have certainly been helpful in my career to date. But the TDP programme recruits graduates from a wide range of disciplines because it is tailored to prepare graduates to become junior traders. So, in that regard, I don’t feel there was anything key from my university studies that has been crucial, beyond developing the behaviours and skills that the TDP recruitment process assesses.
3. Can you describe an average day?
I passed the BP Assessed Traders Course in May 2009, which is the culmination of the TDP (approx 3 years), and I and took up my current role as a charterer within BP Shipping shortly after. Chartering entails finding and negotiating a ship with the requisite assurance and safety standards, in the right place, at the right time and at the best market price with as much optionality as possible to transport each BP cargo. As owner/operator of one of the world’s largest fleets, we also charter out our vessels to the market, so I have to always know the market value of each ship at all times, and as that changes throughout the day. I interact directly with the traders, oil and ship operators, and speak with brokers on a daily basis to source third party vessels and assess market conditions.

4. Can you give a bit more information on the various jobs you did during the TDP programme?
In my first year on the TDP I was a junior charterer with BP Shipping, which proved excellent preparation for my current role. My second year saw me join Strategic Origination as a junior originator. The role entailed producing market analysis documents and presentations for clients; preparing company briefing packs and monitoring target counterparts and key regions to identify new prospects and business opportunities with the senior originators. In my third and final year I was a trade control analyst, working for the distillate bench in London. I also reported daily exposure and profit & loss for the gasoil and diesel trading books.

YOUR QUESTIONS TO SUSAN:
1) Have all 3 of your rotations been in one geographical location? In which cities do you have commodities trading departments? – Daniyar
Hi Daniyar. All of my roles were based on our trading floor in Canary Wharf. However, BP has trading floors in Chicago, Singapore, Houston, Calgary and London, and there are opportunities to move around. – Susan
2) I am keen to become a BP trader, but haven’t studied finance or science. Is there anything you could recommend as preparation for the recruitment process? Your advice would be enormously appreciated! – anon.
The programme recruits graduates from a wide range of disciplines, so you really don’t need to worry about what you have studied, so long as you have a solid academic record behind you. The best advice I can give if you are keen to join the programme is to go to a recruitment event and, if possible, take part in one of the trading games that we run at various universities. You will not only have the chance to talk to graduates already on the scheme, but also participate in a flat price trading game, and take positions (long, neutral or short) based on the various fundamental factors that you are given throughout the game. You should also take a look at the online version of the game. If you are keen to become a trader, be open about your reasons why at the interview. It is who you are and what you have to offer that the interviewers are looking for during the selection process. You are not expected to turn up ready to trade on day 1. The programme will provide you with the skills and knowledge that you need to prove to be a successful trader in the long term. – Susan
3) The BP Trader Development Programme has a, perhaps unfounded, reputation for placing graduates in back/middle office roles. What did you think of the selection process for placements and were you able to influence the decision to suit your career objectives? – Iain
I was allocated my first year role before I joined BP, but thereafter I attended a graduate panel before rotating where I discussed the roles available, and expressed my preferences along with reasons why I felt those roles would benefit me and my development.
The decision is not ultimately yours, but your opinion is obviously taken into account. If you are applying to the BP Trader Development Programme, clearly you want to end up in a front office role. But I wouldn’t underestimate the value of some middle office experience as part of your preparation to that end. If you want to be a trader, it is absolutely essential that you understand how your positions are reported and marked. Likewise most traders look at both fundamental and technical factors, so a year in our analytics team is a very valuable experience.
The middle office and operational roles that are reserved for the graduate programme will see you making a significant dollar impact on the company. The graduates are given real roles with real commercial exposure. I think that underpins the longevity and success of the programme. – Susan.
4) Have you had any previous experience in commodities?- Anonymous
No, I had no previous experience in commodities and I did wonder at the time of application if that would prove to be a disadvantage. But it was evident during the selection process that the assessors were more interested in the way I thought a scenario through or how I approached a challenge, rather than how much I knew about commodities markets.
The Trader Development Programme (TDP) looks for qualities and behaviours in candidates. Three years of on the job learning around the trading floor, coupled with specific training in physical markets and trading techniques provides the rest. So in that regard, the programme was ideal for me. – Susan
5) What was the selection progress for the BP Graduate programme?
Had you done a 2nd year Summer internship beforehand, either at BP or elsewhere? – Anonymous
The recruitment process for the London programme begins with an online application, followed by an online test. Selected applicants are then invited to a two day event at our offices in Canary Wharf to participate in group trading games, have first round interviews and complete a tour of the trading floor. The final stage is a one day assessment with group as well as individual exercises. It may sound like a lot, but I felt the process ensured the assessors had ample opportunity to evaluate whether or not I had the qualities and attributes they were looking for. BP didn’t offer summer internships when I applied, although they do now, but I had undertaken a summer placement at a law firm. I would highly recommend doing an internship if possible. – Susan
6) How did you come to be in the position you are today – was there much freedom of choice in the decision to become a charterer with the Shipping division? – William Clegg
At BP you need to pass the assessed traders course (ATC) to be either a trader or a charterer. Having undertaken a placement in shipping, I knew that the role is similar to physical trading; having a vessel in the market is like having a long position, and having an uncovered cargo like a short position. I really enjoy how much negotiation chartering entails, and volatility in freight markets drives a lot of arbitrage opportunities. So when I passed the ATC and there was a clean chartering (chartering vessels to carry clean products such as gasoline, diesel and jet fuel) role open, I applied and was offered the job. If I decide I want to move into physical trading in the future, I am sure my shipping experience will be advantageous. – Susan.
7) What makes physicals trading interesting? Wouldn’t you rather trade commodity derivatives? – Angus
I joined BP because I wanted to trade physical products, and the fact that I subsequently decided to move into shipping was in large part driven by the very physical nature of freight.
If you buy a physical cargo, you have to agree everything from when, where and how it will be exchanged (and charter an appropriate size/type of ship with all the required load/discharge options if transport is down to you), when risk and title will transfer, loading/delivery dates and location, specification of cargo, what terms and conditions will govern the sale…and of course quantity. Then the cargo actually has to be loaded onto a ship transported and discharged. Ships can’t load to exactly 1.00mt, instead they load volume (a function of density and temperature) within the operational tolerance of the contract. Then what might happen – well, anything. The supply terminal might not have the product ready in time, the spec could be better/worse than expected, the ship could run late, an arb could open…this list is almost endless, and each cargo is different to the last and next. To me, all of this requires a lot of problem solving day to day and presents a huge amount of opportunity. That makes my job rewarding. – Susan
8) I’d like to work at BP, but I don’t want to do the middle office jobs before I become a trader. Is there any way of moving into trading directly? – Anon
Anyone within BP can sit the Assessed Traders Course (with line manager endorsement and approval) with a view to moving into a trading role, so joining the Trader Development Programme as a graduate is not the only route to becoming a BP trader. The programme does offer you exposure to our trading business, and as I have said before don’t underestimate the value of some middle office experience as part of your preparation. If you want to be a trader, it is absolutely essential that you understand how your positions are reported and marked. Alternatively, if you already have trading experience and a track record behind you, IST does recruit traders from the external market.
9) Do you remember what you were asked when you interviewed with BP? – Marco
I guess what you want to know is what you could be asked at the interview stage. So it’s a good question. As I hope has come across in the above, the assessors will want to find out a lot about you. So if you consider yourself to be driven person for example, have an occasion to mind of when/how you demonstrated that. There will also be a technical element to the interview, but it will be less about testing your level of knowledge, and more about assessing how you think a scenario through. I hope that’s helpful or at least reassuring