Any Electricity/Power Traders
Hello,
I am looking to find out about electricity/power trader career path.
career path, growth, exit options.
What I like about the position is challenge, applying macro/business supply/demand knowledge and purely understanding the business of electricity.
Hours will be much more brutal than what I am used to, but I can adjust to that.
I checked few profiles of the other traders, most have been just trading for years. Didn't see too many MBAs (not that it probably matters).
Currently, I am a middle manager at a utility. I can stay and move up the ladder slowly (utility is quite slow) but it can be rather boring..Educational background, engineer/MBA (not top-20).
Appreciate!
I'm not in Texas or power trading, but some friends are, so take what I'm saying with a grain of salt. A common path is being an analyst on a power trading desk and moving to a trading role after 3-7 years. Also, an MBA or other titles don't matter, just get your foot in the door.
Not sure where I read Texas, ignore that. Time to sleep some more.
Since I got my start in the biz on the regulated utility side, I'll throw a little effort behind this. Right off the bat, be aware that there is a difference between being a trader at a utility vs competitive retail vs wholesale trader vs prop shop. Depending on which one you want to do there are different skillsets and different "paths" (I use "paths" loosely b/c this is not a ladder game, its a right seat right time right skills game). I'll try to lay out what I have seen as common paths in my career + taking into account skills that are often picked up in these roles that I think are important to being a trader (depending on many factors some of these might end up skipped, not be relevant due to what shop you are at, or combined)
Utility: Rates (can be gas but power preferred) -> supply analyst -> real time/power plant ops -> cash desk trader -> term trader
Retail: Pricing analyst -> desk analyst -> scheduler -> cash trader -> term trader
Wholesale: Structuring analyst -> desk analyst -> FTR/Recs desk analyst (depends on type of trader goal) -> cash trader -> term trader
Prop shop: Two options A. (most common) Cash or term trader from wholesale/IPP B. (rare) Desk analyst/scheduler (experienced) -> cash trader -> term trader
Exit options (not sure why everyone is always so obsessed w/ this around here):
Utility: Management/Senior Leadership (COO, CEO)
Retail: Desk head -> Trading head/Move to wholesale -> Senior Leadership
Wholesale: Desk head -> Trading head/Origination/Prop shop -> Senior Leadership
Prop shop: more VaR/Retire
A little about expectations as a trader by type:
Utility: Don't mess up cost recovery, long and wrong vs short and fired
Retail: flatten dat book, small sliver around deciding how/when to flatten (emphasis on small)
Wholesale: hedge out power plant per corporate policy, optimize/spec around market ops, facilitate origination/marketing by warehousing risk
Prop shop: spec
MBAs/CFAs/MFin/ERPs/etc. are not really a thing. Unless you are a quant then PhD Math/Physics/EE
what's your view on edf trading?
Late but heard their Houston desk is a shitshow right now.
big balance sheet, revolving door
energyquant Thank you so much for this very insightful reply. Mine is at a utility. Starting out, package is not too exciting - almost same as where I am at.
In my situation, I am asking about exit strategy down the road to figure out if I am not able to do long hours due to health or family reasons as I grow older, what would be my options, where would I land.
there is no exit ops.. the exit is a trader seat
Be warned, the power trading industry is incredibly old school and that was frustrating for myself who was coming out of a HF. You're basically 1 step away from a utility.
Care to expand on what you mean by old school?
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