FTR Power Trading
I'm a previous real-time power trader and am interested in transitioning into a financial/virtual power trading role. I'd specifically like to learn how FTR trading decisions are made using power flow modeling software such as PowerWorld, DAYZER and UPLAN. An explanation with examples would be great as well.
Based on the most helpful WSO content, FTR (Financial Transmission Rights) trading is a highly technical and quantitative field. Traders often use power flow modeling software like PowerWorld, DAYZER, and UPLAN to make informed decisions.
These software tools help traders understand the power grid's constraints and opportunities, which is crucial for FTR trading. They use a variety of data inputs, including historical prices, prices for future settlement periods, weather data, grid data, and historical demand data.
For example, a trader might use these tools to model how a change in weather patterns could affect power demand in a specific region. If the model predicts that demand will significantly increase, leading to higher prices, the trader might decide to buy FTRs that allow them to profit from this price increase.
However, it's important to note that while these tools can provide valuable insights, they're not infallible. Traders also need to use their judgment and experience when making decisions.
If you're looking to transition into this field, it's recommended to learn a programming language like R or Python, as they're often used in this field. You might also consider getting a master's in Electrical Engineering (EE) to deepen your understanding of the technical aspects of power trading.
Remember, it's a field with a high demand for skilled traders, so if you invest your time in learning these skills, you could have a wide range of job opportunities and a good payday in a year or two.
Sources: Power trading - forecasting, energy trader, do I move?, Real Time Power Trading - US vs Europe
As a seasoned RT guy you should be able to land a role as a virtual trader fairly easily at a lot of these smaller shops. They’ll pay ~$100k + % book after cost.
As far as FTRs, what is your educational background, is it in math or electrical engineering? Can you go back to school and get a masters in either? Those roles are very, very quant heavy. Also managing DAYZER is a pain in the dick.
I have a bachelors in mechanical engineering and masters in finance, so lots of math background. I'm also experienced in python and SQL. I've seen lot's of finance / econ backgrounds in FTR trader roles. In those cases are these skills learned on the job perhaps?
This was touched on in the other thread, but that is not enough math for FTRs unfortunately. Also have you continued to develop and maintain your math skills? I took all the cals, dif eq, linear algebra, and probability theory and I don’t know anything. —— If FTRs are something you are really passionate about, I’d look into a mathematics or engineering masters. OR find somewhere you can be an analyst for the FTR desk and go from there either way, I’d expect a year or two before being able to hop in a seat.——
@Marcellus_Wallace will be able to provide additional color and guidance.
Totally agree here. Masters of Finance is more a data science driven and not going to put you ahead of the pack in FTRs. Many people who “term energy” or “virtuals” have a background similar to yours.
If you are truly interested in FTRs best bet is to go sit with someone and be their analyst to learn the kinds of models they create.
Thanks that's super helpful. Haven't done much with calc and DE, etc for a while.. Have used lots of stats from ms fin though. Would you also say the same for UTCs in terms of background/skills required for a seat?
UTCs will be less math intensive than FTRs but also generally a lot less money at risk. UTCs will be more probability and statistics and FTRs will involve all that plus solving/modeling power flows.
Is there a good way to break into FTR trading?
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