Hi everyone,
I am 25, and I have an offer for a 2 years fixed term contract in the enery trading branch of a leading German utility, as a Nat Gas strategic market analyst (fundamental modelling, quantitative analysis, mid-term to long-term price forecasts...) .
I would like to know what sorts of exit opportunities will I have if I take the job, compared to junior trader assistant positions (middle-office, analysis...) at commodities trading houses?
How difficult it would be to move into trading (LNG, Oil...)? Thanks for your help!
What do you think will be your day to day responsibilities in a strategy analyst role vs being in middle office?
What skills and knowledge do you believe a prospective employer interviewing you for a trading role will be looking for?
From my understanding, the day to day responsibilities in a strategy analyst role will be forecasting gas market developments applying fundamental models, conduct market analysis to support decision making, in gas trading LNG, market risk, gas storage and present/communicate results and issues relating to the gas market to trading and other departments.
For a middle office position, I think the main tasks would be daily/monthly validation of PnL, day to day trader's assistance, risk identification, analysis and monitoring.
I think a prospective employer interviewing me for a trading role would be looking for a candidate with strong analytical/numerical skills (able to handle complexity), strong team player able to express market views, with good people skills and easy contacts with customers/counterparts (especially in physical trading), risk apetite, specific knowledge on the market drivers and products traded.
I think your descriptions are close to what I expect the respective roles to entail. Based on what you wrote, I would argue that the analyst role sounds more interesting.
There are instances where middle office roles allow for close interaction with the traders, but in the majority of cases you will be performing admin (eg pnl reconciliation and making sure everything is booked correctly according to confirmations). Even though you support traders, it does not necessarily mean you will learn much about trading or the markets themselves. Also keep in mind hiring processes for junior traders have gotten a lot more formal nowadays. That means that even if a head of desk wants to give you a shot at trading because you excelled in middle office, it is likely you'll still have to go through the same recruitment process as an external junior candidate (albeit with an edge).
On the other hand, two years in the analyst role should allow you to build a very solid understanding of the natural gas market. Which you can then hopefully leverage into a junior trading role. You could add value to a trading desk through your analyses and recommendations (as opposed to making sure things are booked and processed correctly). As a big plus, you will already belong to 'front office'.
I would say the skills/traits you outline are important but they do not hinge on whether you choose analyst vs trader assistant. I presume you exhibit all of the above.
What will set you apart in my opinion is the last bit, 'specific knowledge on market drivers and products traded'. And to attain that, analyst seems the way to go.
Are you actually juggling between multiple offers? Do you have previous experience in the field? If your answer is no, I would strongly suggest taking the job. Breaking into energy/commodities is ferociously difficult but once you're in you're, you should be marketable at a bunch of places.
Hi Chewie, Goodbread,
Thanks a lort for your feedback! I have finally decided to accept the gas/lng market job offer; I'll start in August.
All the best!
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