Exit Opportunities For Real Time Power Trader
I was previously a scheduler and recently became a real time power trader. The shifts are killing me, and can't see myself doing this for more much longer.
What are some exit opportunities that don't involve moving up to day-ahead trading in a few years. I don't have much of a quantitative background, so not sure if I could move into market or trading analyst.
Any opportunities outside trading?
Based on the most helpful WSO content, here are some potential exit opportunities for a real-time power trader:
Market or Trading Analyst Roles: While you mentioned not having a strong quantitative background, these roles might still be accessible depending on your experience and ability to leverage your knowledge of power markets. You could focus on roles that emphasize market fundamentals and strategy rather than heavy quantitative modeling.
Energy Consulting: Transitioning into energy consulting could be a great fit. Firms that specialize in energy markets, regulatory compliance, or strategy often value the hands-on market experience of traders.
Risk Management: Many energy companies and utilities have risk management teams that focus on hedging strategies, portfolio management, and market exposure. Your trading experience could be highly relevant here.
Operations or Asset Management: Moving into roles that manage physical assets, such as power plants or renewable energy projects, could be a natural transition. These roles often require a deep understanding of market dynamics, which you already possess.
Regulatory or Policy Roles: If you're interested in the policy side of energy markets, roles in regulatory affairs or with government agencies could be an option. Your trading background would provide valuable insights into market operations.
Corporate Strategy or Business Development: Many energy firms have teams focused on long-term strategy, mergers and acquisitions, or new market opportunities. Your market knowledge could be an asset in these roles.
Renewable Energy and Sustainability: With the growing focus on renewable energy, there are opportunities in project development, energy storage, and sustainability initiatives. These roles often value market expertise and operational experience.
If you're looking to step away from trading entirely, focusing on roles that leverage your market knowledge and operational experience without requiring heavy quantitative skills could be the best path forward.
Sources: Physical Trading: Best commodities to be in?, Refined fuels trading experience but lackluster Engineering GPA, energy trader, do I move?, Real Time Power Trading - US vs Europe, BP GDP Path
Hey bud,
Exit opps for RT traders is going to be what you make it and what you are really interested in going after. I saw a guy exit from RT power trading to be the President of an aerospace company. The sky really is the limit. You have to ask yourself what you want to do in the short, medium, and long term, and where is the career progression. There are ways to progress within trading, but not sure if moving to an analyst position is your best bet, because analysts typically want to eventually move into trading, so really you'd be on the same path but almost a step back. And if you want to stay in the analyst lane, you will prob need to become more quantitatively inclined. I think we're at a crossroads in trading where some old school folks are going to (or have already) been pushed out of the market and can no longer succeed in trading with what used to work. If they don't adapt, the markets will swallow them. Now we're seeing RT traders with python and ML expertise, so this is the next generation of traders. Data-driven from the beginning. So, my recommendation is to give it a good ponder and figure out what avenue is best for you to exit into. As far as other things that aren't related to trading, it's tough to say. There is a lot you can do with the experience you've gained, but the avenues aren't always obvious. Find the type of work you enjoy and focus on growing in that vein.
Slight hijack, but where do these python/ML traders come from? Interested in power trading, but most roles are in physical programmes, but like 5 commodity quant roles for top HFs (in London).
If I wanted to go down this route where should I be looking?
I think what we're seeing is that knowledge/skill requirements have increased, so more early career folks are learning these things that didn't use to be necessary. Personally, I think there are some extreme limitations to a strictly quant approach in power trading. Not to say that you can't find a viable strategy, but in energy markets, fundamentals are king. Bridging the gap between fundamentals and quantitative approaches to achieve a hybrid strategy is increasingly valuable. As far as where to look if you're wanting to go a more quantitative route, there are many more small prop shops and HFs in this space now that didnt exist long ago, so there should be more options than ever. I'm not that familiar with the European power trading space, but I know some European firms have entered US markets recently, and vice versa. Do some research to find out what speculative trading shops are in your area that fit what you're looking for and have lower turnover and strong career development potential (doesn't have to be a formal dev program, but either way, it's good to have a mentor).
"Hey bud,"
Why so condescending?
Dude gave a full blown novel of knowledge and that’s what you focus on lol
It wasn’t meant to be condescending at all. It’s sad that was your first thought.
If a RT trader is genuinely looking to transition off shift work and move into a DA Virtual/PTP/Congestion trading role, what should they be studying or aiming to demonstrate to be a strong fit for these desks?
While few years on a RT desk provides valuable operational and market intuition, what specific skills, analytical capabilities, or evidence do firms typically expect to see from such candidates during interviews particularly for desks focused on ERCOT?
In other words, beyond RT execution experience, what separates an RT trader who is interested from one who is hire ready for a Virtuals/PTP/Congestion role?
A pretty common next step is asset manager. Typically those guys have a few years of experience under their belt, at least. Origination is also an option.
Is it the sleep schedule? Or the fact that it’s not a regular 9-5 and you’re missing weekends? If it’s the sleep schedule, it get easier and you get used to it - if the latter, sorry but that just comes with shift work.
Damn, I was looking into power trading but maybe it isn't as glamorous as it seems to be. I will stick to aiming for oil scheduling
Trust me, power trading can be quite glamorous. Just need to find your niche to become competitive. I’m biased, but I think it’s way more interesting and fun than oil/gas trading/scheduling. Oil trading physically is largely relationship-based. Doing it financially is more of a macro indicator focus. But either way, it’s def more boring than power trading. When you’re white-knuckled at your keyboard, watching $9,000/MWh prices rip in your face (or in your favor), it’s very hard to be bored. If you want something dynamic and entertaining, it’s power trading.
Could look to gas scheduling. This is not a traditional exit opp but you know a little about power/gas so could get you an interview.
Gas scheduling doesn’t come without its woes though, long days, weekends/holidays on call etc…
Short answer is: PNL history. If you don’t have demonstrable experience taking on risk and generating positive PNL, you are unlikely to get hired to trade those products. As far as what you can study/learn, power flow modeling might be most useful, i.e. Dayzer, PowerWorld, UPLAN, PLEXOS. This could land you an analyst role at a prop shop/hedge fund supporting a virtual/PTP or FTR book. But if you find yourself in this predicament, another suggestion is to lateral to RT trading at a shop that lets folks trade virtuals/PTP. Then you learn the game.
Thank you so much for your response. I was hoping that demonstrating a strong understanding of topology, constraints based on historical performance, along with paper trading results and backtested strategies that show viable, consistent returns, could be sufficient to earn a seat on the desk.
With that said, when it comes to proprietary software such as PowerWorld, PLEXOS, and similar platforms, these are commercial grade tools and, to my knowledge, are not realistically accessible to individuals unless the desk provides access. Are there any tools or platforms that one can meaningfully excel with that don’t cost an arm and a leg, especially those that are respected or widely used in the industry?
You are right about that - they are commercial level tools, and not usually cheap. If you’re at a shop that uses any one of them, they’re often on enterprise-level subscriptions, and can prob add an additional user at no extra cost (depending how they allocate costs). At some companies, they might consider this to be no real additional cost. At a hedge fund/prop shop, they likely have x number of individuals using it for y cost. So cost/user is y/x. If you add one more x, it gets cheaper for everyone, but the marginal cost is attributable to your book.
That said, I’m not aware of any free variants of these types of software.
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