Houston Energy Trading: Which Degree?
I have 3 years of work experience developing real-time risk systems for commodities trading in Houston at a BB. BS in Computer Science and BA in Economics from UT Austin. Want to eventually become an energy trader in Houston. 3.95 GPA, 750 GMAT.
I think an MSF program would give me time to do some independent study and network network network. Which program do you think would place the best in Houston for most likely a role as an energy trading analyst: UT Austin MSF, Tulane Master of Management in Energy, MIT MSF, or other (MBA or different school)?
All these programs are relatively new, and UT's program is brand new. Top choices for employment after graduation would include Shell, BP, Vitol, Koch S&T, Chevron, ConocoPhillips, before BB.
Any advice is much appreciated. I will need to apply very soon, and I would like to have a preliminary ranking in my mind. Scholarships and/or rejection letters could obviously change things.
Wow, with that type of GPA and GMAT, I'm sure you would be a good fit for MIT, no? I'm by no means any grad school admissions expert but that's just my gut feeling.
UT's new MSF is about to start their inaugural year this fall, so I don't know how I would feel about going for it. One thing to look out for is that their proposed curriculum doesn't look particularly quantitative if you compare to other programs out there (I'm not sure if you care about this or not). From what I understand in terms of rigor and quantitative content, it seems to sit in the middle of an accelerated BBA in Finance and what you would find in a quantitative MSF at Berkeley/MIT. They're not looking to train the next managers of LTCM, but to get those who never majored in finance in undergrad/didn't get exposed to finance up to speed in a one year curriculum. Upside is that you do get to stay in Texas too, and there literally aren't any other options in Texas.
Disclosure: I've attended one of their MSF info sessions.
MIT would be possible given my quantitative background, but I'm not sure it fits my goals. I'm not in love with math even if I am capable of doing most of it. Also, I don't want to be pigeonholed as a quant and I am not too confident that a quantitative degree fits the Houston market. Not a huge market for quantitative traders like NY.
I would feel better about focusing on the physical side of the business and using my relatively good quantitative skills as a differentiating factor. Is doing the most quantitative degree possible the best idea for Houston energy trading?
I didn't major in finance in undergrad, but I'm fairly up to speed. I imagine any curriculum will help to cement some concepts that I grasp more by instinct and inference now. I will mostly be using school as an opportunity to network and access career services, Doing MIT vs UT will require more focus on studies and doing long distance recruiting most likely with less help. I am a little worried that UT would focus more on corporate finance than I would like.
Of course, I am the one asking for advice here, so feel free to offer counterexamples or recruiting trends I am not aware of.
From what I understand, UT's MSF is about 50% corporate finance, 50% investments. It seems like a fairly balanced curriculum but may not be what you're looking for. In the info session that I attended they said that there probably won't be flexibility for students to take electives and/or substitute curriculum classes since this fall will be their first year.
Have you considered Vandy? Their MSF program is fairly strong, only 1 year long, and curriculum is pretty flexible especially when you enter the spring semester: http://www.owen.vanderbilt.edu/vanderbilt/programs/ms-finance/curriculu… This way you can take a lot more courses on investments theory if you wish.
I agree that there are probably more established programs that can offer a better curriculum, but I wonder about recruiting for energy trading in Houston from UT versus Vanderbilt, MIT, Villanova, etc.
In the end, it is all about getting the right job, with something like Shell's trading development program being a top target.
Tulane's masters in energy places really well into Houston, don't know much about the others
Does anyone have placement statistics for this program? There seems to be a lot of conflicting information.
I know a few people who have graduated from the program, and a quick linkedin search yields a few results. Might want to consult monty09 for this, i believe he does the energy rodeo for houston
MBA to trading is very very tough without trading pre mba and even more tough in Houston.. half of the firms you listed dont hire mba's anyway
I was referring to MSF programs but maybe the end result would be the same in your opinion. How is one to get experience when all jobs require experience that is mostly unattainable except straight out of college? A degree should be more relevant for a career switcher like me and at the very least would let me take a shot at entry level trading analyst roles that undergrads can get. It is nearly impossible to get these jobs otherwise.
people have that mind set but honestly it does not work that way
no one knows how to truly vaule the msf
cause those who studied the msf were never taught how to value the msf...
Have you applied directly to any of the firms you listed? With your experience, I think you would be able to make a move to a MO role and then work your way to a FO role with one of the physical shops. Just my $0.02 but I think this will save you some time and money then going the MSF route. Even with a MSF, I don't know of any of those independent shops that would put you into a trading role straight out of a grad program. With a MSF, you could get on one of the grad trading rotational programs at one of the majors but again, you're probably looking at 3-4 years (1 yr for MSF and 2-3 years of training) before you start trading.
So far I have focused on applying to FO roles (trading analyst, risk analyst). What MO roles would you consider good steps in the right direction? If anyone knows of any good positions, please let me know (especially if you have the ability to grease the wheels). Once again, I think the experience paradox works against me even if these roles aren't as highly sought after. Every job seems to require previous experience.
I'm not expecting a trading role directly after graduation. I expect to have to start as a trading analyst or trading rotational program like a top undergraduate finance major would. I agree that I would be looking at 3-4 years before trading, but that would put me close to the age when I have seen most energy traders get their first shot (~30).
Is doing MO and expecting to move into FO and eventually to trader really higher probability then going back to school and having a better chance (I think) of getting a FO role?
Applying directly to these firms is just a crapshoot, one in which the odds are greatly stacked against you. The absolute best thing to do is network. Get your name out there to any and all that are in a position to put you on a desk. Take a step back and realize what you have to work on to better improve: A) your knowledge of the energy markets and what traders do day in/out B) Express your interest in transitioning to a FO role, not explicitly, but people can tell by how you carry yourself and the words that come out of your mouth whether your interested and capable C) your ability to relate to traders and refine your networking chops. Find out what works best for you and leverage it to the max Sit on desks with traders on the other floor, express your interest, ask insightful questions, not everyday questions that a kid in ops can answer or a question you can find yourself by reading a daily research report The odds are stacked against you, but it does happen, its just a matter of determination and ability
As a last resort, go the school route. Hopefully your networking prior to that, both internally and externally, will put you in a good position to get the FO folk to forward your information to HR folk and set something up for the recruiting.
I agree with all of your points. Personally, I am about at my breaking point with regards to my day to day career and lack of progress towards my career goals. I am realizing more and more that a lot of this is my fault. I tend to focus too much on my current job. That has helped with my current career, but meant a lot of nothing for my future career. School might be just the thing to make me refocus and double down on developing myself.
If that is the right decision for me, which programs should I apply to over the next month?
WUSTL, Princeton, MIT, Vandy, Tulane, UT
Can't go too wrong with either
Not neccessarily in that order. Ant & Monty09 would be great resources for this.
MSF, is waste of time. Network more. You should be able land a scheduling position easily with your background. If you are as good you think that is.
I am not claiming to be good. My stats look good, but I still have a long way to go when it comes to understanding the fundamentals of the energy markets. I'm not sure it would be so easy to land a scheduling position because I am probably lacking the experience required or they are only looking for people straight out of school.
Why, in your opinion is an MSF a waste of time? Sure the classroom skills probably don't transfer well, but the access to career services, networking opportunities, and most importantly time to focus on improving my knowledge without 50-60 hour work weeks sounds worth it.
I see you are a 1st year associate in S&T. Did you acquire that position via an MBA?
No, did not.
You have an insane gpa and gmat. You are from a top school. You have the ability to program. Lots of schedulers are way duncer than that, heck most trade analysts. Likewise all you really need is some basic experience in accounting or so to get a scheduling job usually. As I said network, network, network. You do not need an MSF to get into a shop with your background.
Fair enough. I think I will apply to UT MBA, UT MSF, Tulane MSF, and MIT MSF. In the meantime, I will still be looking all the way until tuition deposits become due (and possibly beyond). If anyone knows of any entry level analyst or scheduler opportunities available in Houston please let me know. I would rather not go back to school unless I have to, but I feel like now is the time to make a move.
Shell/BP/Chevron/Conoco all have graduate trading programs--you don't need a MSF to apply for it. Vitol is freaking impossible to get in unless you know someone--they typically hire experienced personnel only. I'd add Trafigura or Noble to the mix.
I work in oil/petroleum products and to be honest you don't really need a MSF or highly technical degree to trade physical. Don't get me wrong, you have to be good with numbers but I mainly look at basis/freight and other spreads, also most physical is traded OTC (yahoo freaking messenger). Nevertheless, you have a pretty strong background and I'd skip the MSF and gun for trading assistant/graduation rotation.
Also your background might be a good fit for power trading. As usual, ask monty.
The problem with the graduate trading programs is that they seem most interested in new graduates (undergrads mostly). Could an MSF or MBA give me a better shot at getting noticed for those programs?
As I think about it more, the physical side of the business might benefit more from an MBA rather than an MSF. The logistics of moving the commodities, the soft skills come in handy when meeting with clients, and the degree is more recognizable in case things don't work out.
How strong would a UT MBA be for the graduate trading programs at Shell/BP/Chevron/Conoco? There would also probably be some trading rotational programs for MBAs at BB like BAML, Barclays, Citi, Deutche Bank, and Macquarie in Houston doing commodities trading.
Everything blender said is spot on.
You are wrong in that most those programs are for new graduates. Actually some of the ones you mentioned only let current employees apply to that program. Yes they also recruit from top schools from time to time too but there is more than 1 way to get in.
Again network network network. You could get a degree in basket weaving and learn to click a "red or green" button. The MSF is nice to have, but won't teach you when to press which at the right time and not nesscary.
I know the CEO of Vitol and he does not look for grad degrees of any kind nor do they do internships. They hire exp traders. Traf does hire college grads but not sure of MBA's. COP hires MBA's into a finance program that does not touch trading same with Chervon. BP ended their MBA trading program I want to say in 2010.
I know a guy that went to WUSTL for his MSF, he did a 4 year stint as an Analyst at Koch before they put him on the trading desk.
My two cents is that an MBA doesn’t offer any real transferable skills to energy trading. Attending happy hours, tweaking your March Madness bracket, playing a few rounds of golf or cold calling will do far more for your soft skills than any MBA—you don’t need a degree to be social.
I think other guys have touched about this but physical trading is VERY relationship driven—you cannot be sequestered from personal contact and stare at a screen all day. The competitive edge that most of the trading shops have is that they have a strong relationship with a guy or someone owes another person a favor and hence they’ll cut you a deal. It’s more akin to playing poker with your friends. There is a dance to the field where you’ll be going to lunch, dinner, stripclubs, cook offs, sporting events, vacations and what not with your counterparties. Hell, my days start with yahoo messages asking about people’s weekends/kids and what not.
I want to highlight that one of the most important aspects of physical energy trading is not formal education but rather personality fit and of course your experience in the field. Advanced math skills might be helpful in power trading, as the Monty as usual, but at most RBOB/distillates/oil/ethanol desks, you’ll only need to convert units (for specs) or add/subtract spreads. I remember some new kid on our desk, an ambitious quant guy, wanted to “calculate the standard deviation for ratability on contracts”—our senior gas trader asked him “what’s the standard deviation of me kicking your ass?” The main take away is that you don’t need to be e a genius to trade but just sharp and dependable.
I have found that most successful energy traders earned their spot on the desk by cutting their teeth and learning the overall physical energy markets. You’ll find that rack/pipleline traders earned their positions through years in dispatch, scheduling or logistics—if you want to trade a single bbl you need to know things like how a coker going out or a Magellan terminal capacity could impact your demand. So to give you a long winded answer—you are much better off networking your ass of and making it to a desk rather than spending a few years in school. You WORK building real time trading systems and while it isn’t direct experience, you should be able to have some contacts and find your way to a desk. Maybe apply for trade support or a trading assistant position.
Network your ass off, brush up on the energy markets and then network your ass off.
Thanks everyone for the great advice. I've decided to postpone applying to school until at least the fall. I'm going to network hard over the next few months. I have already made some good contacts over the past week.
If anyone has further thoughts or any leads, please PM me.
Just curious, where did you end up after all of this?
That last post was spot on.
Texas A&M also has an MSF program but I'm not sure if it's just for the kids in their trading program or not.
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