Energy trading at top BB - good place to be?
Hi everyone, I'm currently going through the placement process for a S&T SA program at a top BB. I'm really interested in Energy Derivatives desk due to the fact the product is very macro, I vibe'd well with the team and that they are super lean ( lots of associates, few vps) so that could be good for upward mobility. A bonus is that it seems they have a risk taking culture and gives analyst a book within their 1st year.
My only concern is that it's particularly a niche field and I don't know what the impacts of automation are to banks trading oil.
Any thoughts and insight would be much appreciated.
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“Energy Derivatives desk due to the fact the product is very macro,”
not necessarily. Only crude (and products to a lesser extent) is macro, but what about gas, power, emissions? Not macro
Unlikely they give you a book as a first year, if so it will be very limited, just to get your feet wet. Better than nothing I guess? Not a selling
point
Seems like your analysis wrt “lean desk” and upwards potential is way off unless you can explain further. The organizational setup u describe (alot of AOs few seniors) is actually the worst for someone in your position. It means you are less likely to be promoted fast (as theres a ton of AOs who arent moving up to VP), abd youre competing against a bunch of people 2-3 yrs older than you to run pnl and have a book. In mkts you need to be able to look at the same thing from many angles. in your shoes i would ask myself: hmmm that is odd, why doesnt this bank promote any if these associates, and why are there so many in the first place? If I spend 2 years there, will the higher ups promote to AO or will they tell me to F off because theres no room to promote and you should be happy to have a trading gig at a “top bb”?
Th ate a very good point, it was explained to me that lean headcount is due to growth recently rather than ao getting booted before VP. Would that make a difference?
What are the career prospects and exit opps for this desk?
Hard to say, but that doesn’t sound very lean to me...don’t think it’s a huge issue though esp if you actually want the product.
exit opps are trading energy...either at a diff bank or on the buy side. Depending on
product possibly the financial desk of a trade house.
"really interested in Energy Derivatives desk due to the fact the product is very macro"
made me lol at this fluff
If you're interested in macro, why not rates/FX trading then?
I'm interested in rates as well. For energy specifically, I like the underlying fundamentals behind the industry. Could you give some insight into Energy derivatives?
Also, as an incoming intern I have very surface-level knowledge so how about instead of calling it "fluff" you educate me on why I'm wrong instead. Give me the grace you'd give yourself as a 3rd yer uni student. Thanks
Tell you something about energy derivatives?
I'm short 300 MW Feb21 On-Peak 100c ERCOT WEST RT financial auto-exercise at $0.85/MWh.
THAT is the scariest sentence, I have ever written.
...and why I love my market.
That is the scariest sentence I have ever seen. Going to be very nuts as we begin to come out of this. Good luck to you (and all ERCOT traders)
thoughts and prayers...
How'd it turn out?
For a noob, what does that mean?
it means he is in for a wild ride
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