Power Trading - Analyst - Help!
Hi all, I'm interested in this power trading analyst position at a BB bank. The opening is for the Houston office but I talked to one of my buddies at the firm and said the group is flexible to a NY position.I'm currently a 3yr analyst on a US rates desk (sales side) at a different BB in NYC. I don't know if its the product or just being on the sales side but I'm looking for a change and commodities in general have always caught my eye.End goal for me (i think) is: Switch over to trading side, and maybe have an opportunity to move down to Texas, have some family over there and I love love the people and TX culture.Would you all please help a fellow monkey out and guide me to a few resources to learn more about the power industry, specifically what the trading analyst would do on the desk? If you could also provide your thoughts on the industry, that would be extremely appreciated.Thank you all!
I will leave the day to day to the power traders on this board.
But for core concepts, I suggest you look up the term merit order. This is a supply and demand concept (ie cheapest sources of supply meet demand - up to the marginal supplier who sets the price) that is fundamental to all energy commodities markets. There are lots of nuances to each commodity, but that system of marginal economics is shared by all of them.
For oil, the outright price is about finding the right price to incent producers to make enough to balance the market but not too much (oil is a 100 million barrel per day market and ~2mbd being out of balance is a massive deal). A 2 mbd imbalance for a month is 60 million barrels, and there are only so many months oil tankage in the world can tolerate that. Oil differentials also operate on merit order but that is too complex a topic to summarize briefly. Power has the kicker of not having storage. So supply must equal demand. And it has the other kicker of having supply and demand change very frequently due to heat, cold, wind, sunshine, etc.
why do you want to move into power trading? just b/c you want to trade?
I was a rates guy before I moved to power and let me tell you, if you like macro, power trading is not the right place for you.
CXW.
Are you sure? I mean this sincerely. Are you sure?
I encourage anyone to go into power and gas. Everyone.
You have to understand this. Going from rates to commodities is like English to Spanish. Going from Rates to power is like going from English to Ancient Sanskrit.
I could give you 10 books to read, but that would be counterproductive
If you want to chat, DM me.
You should go for if, but you need to figure out why.
I would not move to the NYC office. If you going to do this, go all-in being in nyc for power when you know nothing and face a massive uphill learning curve aint a good decision. Beyond that start by reading the EIA site and get an idea of how the stack works. The analyst tasks wont be way different than what you doing now.
OP is already in NY and I guess wants a trading seat
Sorry yes, my point was position is in Houston mainly for a reason. The top brass is there and coming to get ground running and learn fast one should also be there.
Look up Lian Kor.
He went from energy to rates RV.
Ha! I went in the opposite direction. you know why he did that?
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