energy trader, do I move?
Hey guys, just finished my first year at a Houston energy prop firm. I joined out of school and started trading virtuals (a few months in) and FTRs recently.
I ended up with Total Comp around $350k, which I can’t complain about, but I feel as though my learning has grown stagnant. I also want to eventually move back to the north east. Should I stay for another year and jump or start the process now?
How did you get a seat out of school?
I believe it's not unusual in power. Still a junior trader
Did you go to a top school?
.
interested in learning the firm, would you dm me that info?
Interested as well… if you don’t mind. Thanks in advance
First of all congrats, 350k first year is awesome.
There's power shops all over so at some point you should be able to move back to the northeast, especially NYC area. It doesn't hurt to reach out to a recruiter and assess your options, if you want some names send me a PM and I can give you some contacts.
Now for the advice part, I would not recommend leaving right now. You are still very early in your career and most places that will want you to have more experience/longer P&L history, especially if you want to move and start trading right away. You should spend all of your time focusing on learning FTRs and I mean really learning everything. Memorize the transmission system, ask to go to classes/conferences on powerworld, dayzer, promod or whatever program you find works best for you. I'd even say look at getting a masters in EE. Learn a programming language (R and python are probably best). There's a ton of demand for FTR traders and because of how technical it is, very limited supply of good ones. If you spend your time learning all that, in a year or two you will have your pick of jobs and the capital to get a really good payday.
Why are FTR traders in demand? I get supply issue but merchants/utilities don't need too many FTR traders, correct?
In my opinion, there's two main reasons:
FTRs are a popular thing to trade among smaller prop shops. It's a very quantitative field, and everyone with a quant background looking to get into new markets thinks they can model it better, so you have a lot of smaller players trying to get involved. FTR trading also overlaps with virtual and up-to trading so it completes the portfolio for all the shops doing that stuff.
Credit requirements are generally lighter at the ISO level than on an exchange. Using PJM as an example, they have changed the credit requirements to be more stringent so this will be more difficult in the future, but it used to be possible to create portfolios with almost zero requirements. Therefore, you could create portfolios with potentially millions of dollars in payouts and all it cost you was becoming an ISO member and posting the minimum capital to do so. Look up Green Hat bankruptcy if you want to see where it got PJM in the end, but the best traders can still create huge portfolios with low credit requirements.
There's always hedging around those assets. FTRs can definitely save companies from future losses or shed light on problematic areas that may impact that node and or hub. I worked for one of the largest power providers in France and we had a dedicated FTR desk for several ISOs.
Thanks for the reply. I’ll likely stay here for another year and have been coding more for tools of my own use and some models for virtuals. I’ll dm regarding other firms.
DM me if you want confidential information on my opinion of top ftr shops. I had a project of following up on best results based on 2021/2022 P(L). However, the market has changed, and it wil be tougher for some smaller shops. Some of the larger shops have all resources, use Dayzer, and the $100k tools which can support modeling/analytics for maximizing strategies/profits. Whether you move this year or next. The recent history is helpful. Keep in mind, as you likely know, the market has changed (June 2021 - Sept. 2022 bigger p/l) and will likely see those changes play out in hiring offers. Some firms still paying pjm / ftr traders $1mm - 2mm annually.
Can I dm you?
Great responses as usual. That said, will say I think FTR been in demand for exact reasons mentioned. But for like 18months now, all power traders (mathi, non-mathi) are in demand. Some shops expanding to power from gas, higher inflation environment want people closer to power. Truly if you want exposure to the massive us infrastructure and overall inflation cycle, power is the place to be. So yah its all bid.
What are these non-mathi power trading roles you are talking about?
Depends on the ISO. But DA, weeklies and virtuals are not that “mathi”. In fact reading gen stacks and iso rules all day probably takes you there faster.
I do not consider someone who codes in python btw “mathi”.
such cheap nat gas makes 2021 and 2022 spreads look crazy vs now. But good to see you’re bullish power
I'd stay for another year. I trade CRRs and PTPs along with trading 2 years out the curve. Build your resume with consistency and you'll be great. If you're junior are you submitting the trades or just helping with the analysis?
I started trading virtuals within 6 months. From analysis to execution
Cool. If you do start the process - the worst that can happen is you meet with senior FTR traders while interviewing and they give advice on how to get better or really just crush your hopes/dreams which will still make you better in the long run. Do you use DAYZER, PowerWorld or UPLAN? Any power flow models? Or have you built your own?
It means you have great strategies. Nice.
I'm trading in the Houston area as well.
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