Interested in both distressed credit and energy trading
I have a peculiar interest in both distressed credit and power trading. Are there any career fields that combine both, or will I have to choose one or the other?
I have a peculiar interest in both distressed credit and power trading. Are there any career fields that combine both, or will I have to choose one or the other?
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Question doesn't make sense. Trading power (the commodity/futures) has no "distress" in terms of issuer default risk. If you are interested in energy companies, there are plenty of distressed companies whose primary business is in the energy sector
Maybe trading in the distressed bonds of energy / power companies could be something of interest to you. With oil prices where they are maybe there are companies that are bigger buyers of oil/gas (a purely gas fired power plant) that don’t have the ability to pass on their costs to customers which could be facing distress. Good luck
Yo, I'm a power trader of over ten years. Power trading is inherently power trading. This is much different than distressed credit. You need to focus on one area or the other and not try to get "cute" with it. Both are difficult, volatile, complex, and brutal at times. So, you at least have some commonalities that maybe you're interested in between the two. But these are different worlds. I recommend you focus on whichever one you are more interested in. I am naturally biased, but I can say you will rarely be bored in power trading. I'm not sure the same is true when trading distressed credit, although it sounds like there are def some roller coaster rides there and a lot of uncertainty due to information asymmetry, which also exists in power markets. Some market players have an inherent advantage over spec traders (owning physical assets). Most folks tend to hone in on one area of my industry, i.e. FTRs (long-term congestion product), virtuals (short term congestion), physical power flows, ICE (exchange) trading - either short or long term, or asset-backed trading. Some do multiple of these. I myself do several because I think some diversification is helpful for optionality and cross-product or cross-market arbitrage exists. If you get into either of these fields, you will find that people are heavily specialized. You can't really just casually trade power. I will assume the same is true for distressed credit. You'll always be watching market movements, being aware of industry changes, regulatory shifts, announcements that move the needle. Right now the biggest thing people are talking about in power is data centers. 8+ years to get through the interconnection queue in PJM if you want to pull power from the grid. So now companies are circumventing that by building behind-the-meter gen to power their data centers (or at least part of them). And thus, tech companies like Google and Meta are hiring power trading to help manage power supply to data centers worth billions of dollars. Makes sense to have someone on your team who can help optimize the management of your largest cost. This is the progression we're seeing in the industry. It is full of new developments and interesting areas to specialize in. Happy to chat more if you want more info. I'm also a mentor on this platform and available for calls.
What would you suggest for getting into power trading? Is a STEM degree necessary? Are normal graduate programs like bp's or Shell's a good way to start?
Heyo. Short answers are: no STEM degree necessary, could do biz/finance, etc. just don't major in spanish or philosophy pls if this is what you want to do. Yes, TDPs (trader development programs) at any major or large company that does anything with power will be greatly beneficial. This typically involves rotating through several roles over about 2 years and then getting placed within a certain group.
Yo can I PM you
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