Differences in trading styles between energy commodities
In terms of physical trading with respect to power, natural gas, and oil, I've heard that power trading is mostly quantitative (requires stats and programming skills), and physical oil/natural gas trading is more relationship based and trades are made on the phone or in person. I would really appreciate if someone could verify this and also go into more detail. Thank you!
Yeah in physies you gotta swerve bend that corner woahhhhhh
So usually I like to classify the 3 in increasing frequency of data:
Crude:
with crude it has the least frequency of data, yes you have your weekly storage stats but generally data is a couple month lagged before you can true up your data. Physical markets are typically dealt via otc or brokers with very little trading on screen. Good fundamental models still are built via some code (usually python based) but can vary.
Nat Gas:
This has a higher frequency of data, daily information on pipe noms which gives you a faster feedback loop, daily spot markets where you can see how the market balances each day. increasingly gone to trading via the screen, brokers are still used for basis markets but are becoming less needed especially if the basis market is on the more liquid side.
Power:
This has the highest frequency of data, hourly information on demand/flows, hourly spot markets where you can see how the market balances each hour. Usually there is a 24 hour real time trade desk that trades 24/7. Most deals are done on screen, term stuff can still be done via brokers. Coding background is usually advantageous given the amount of data available and as you deal with bigger data sets excel does a worse and worse job of analyzing and cleaning the data.
Deleniti quos alias et quis iure natus. Non sint voluptatibus sed dolor quos earum. Nihil voluptas voluptatem esse magni eveniet tenetur. Fugit facilis accusamus quaerat eos quibusdam exercitationem nesciunt similique.
Quia occaecati dicta quia. Voluptates sapiente magnam asperiores ratione esse iusto. Laudantium error similique dolorem temporibus dolore soluta ipsam. Vel dolorem velit tempore occaecati assumenda. Dolor laboriosam magni non et consectetur quia.
Possimus minus asperiores quia et aperiam at. Et velit quos placeat. Reprehenderit aliquam voluptas consectetur voluptatum. A consectetur quas non dolores maxime id. Et repellendus repudiandae quia doloremque.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...