State School to Trading Physical Gas My Story (Long)

I've posted a few times here in the past but just wanted to come back and tell my full story in the hopes I may be able to shed some light on my journey and maybe help a few of you monkeys achieve your dreams. If you don't like reading turn back now, you've been warned(redacted it down some):

Grew up fairly middleclass suburban life, nothing too crazy dad worked hard mom stayed home. Always did well in school top 5% of my class but no super genius, varsity athlete, yadda yadda. Offered couple full rides to the few local/state schools I applied to.

Majored in Finance with a foreign language minor at a top 10 state school, 3.5+ GPA, study abroad. Guidance counselors sucked and I had no idea about any sort of recruiting timelines or that junior year internships were a big deal until it was way too late.

Random junior year internship at a brokerage. Came away that summer with the dream of being able to trade for a career (like every other finance major). Set my sights on the FX/Rates/Commodities space.

Being so unprepared and behind in the "traditional" recruiting pipelines for most sales/trading roles I decided to just go straight to grad school, because it was looking like I was about to graduate jobless and what better thing to do then take on $30k in debt and give myself another year or two to get a job.

Applied to a few different international finance/economics programs, got denied from pretty much all of them, but did wind up getting accepted to a school in NYC for an economics program. My college brain reasoning for pursuing grad school was I already had the "finance" background but if I wanted to work in the FX/Rate/Commodities space having the "economics" background just made more sense and would surely get me hired. Hindsight 20/20 this was actually probably the best decision of my life but not for the reason I thought.

The program itself was pretty blah, higher education is almost never worth it (IMO) unless you're trying to be a lawyer or a doctor, but it actually really helped me in giving me a resume filler, the opportunity to network, and the proximity of being smack dab in the middle of one of the largest financial hubs on the planet.

Was able to get my foot in the door working part time at a BB first half of my program through a student that was graduating. Needed someone to replace him and he recommended me. Was a BO role but good name on the resume and paid pretty nicely.

My real saving grace came through an alumni. Head of my program forwarded a request from a previous alumni looking for someone to help with gathering data for some commodity project. Description was to help "look at commodity flow basis and create a model looking at VaR for a proposed financing project". Super vague, but ton of buzz words and with a respectable commodity firm that paid even a little better than my current gig, where do I sign? Met the guy for coffee, he told me it was some crazy project he was tasked with working on and he had no clue how long it would last or how long they'd need me. Told him that sounded good enough to me and he brought me onboard.

Wound up working there for rest of my masters program. Got pretty good at excel through helping to update and build out their model they had. Picked up a good bit about physical commodity pricing and basis etc. Got to mess around with Bloomberg on the daily, which was cool. (had access to a terminal across from my desk that I would pretty much sit at until someone else in the office needed to use it)

With it starting to look like I would be graduating again without a job. Tried talking with HR about open positions both in the US and also flew out to Geneva (on my dime) to try and get an apprenticeship with the head office. Needless to say as an English only speaking American didn't fly over too well and I came away empty handed.

Wound up Graduating from my masters program with my MA and no job, but was able to convince my boss to let me stay on as a "paid intern" until I actually found a full-time role. Hit the books (google) and after researching the best way to become a commodity trader started applying anywhere and everywhere for any sort of entry level analyst/ops positions, as these are the bread and butter to an eventual trader role in commodities.

With a BB and a top commodity house on the resume I actually netted a few phone interviews from my hundreds of online applications that progressed to in-person/final round interviews. Flew out to Chicago & Houston all expenses paid, as well as, interviewed in NY for a few different entry level ops roles. Eventually wound up getting extended an offer for an entry level gas scheduler role with a large producer that I originally applied to online. No personal/alumni connections just an online application and my own interviewing abilities.

Came in completely green, youngest scheduler on the desk (pretty sure the entire floor/office at the time). Worked hard, continued to learn all of the pipes we schedule on forward and backwards. Asked smart questions, no (major) screw ups, was an asset to my traders, and became good friends with them all over the years. After 3 years of scheduling was given the opportunity by a fellow trader earlier this year to learn and eventually take over the daily cash trading in my region. Can officially say that i've traded physical nat gas at times over 200k MMBTU/day. Was a really biter sweet moment getting lifted for the first time or selling the FP highs of the day on gas taken into cash for the month. I'm just continuing to learn and am still scheduling along with cash trading currently.

TLDR:

1.) Networking is key

2.) Always be working/interning if possible in some relevant field never discount a role at a big name firm no matter what it is, foot in the door is better than being on the outside.

3.) Work hard and be humble, don't mess up, ask smart questions and learn

If any of you younger guys have any questions i'll try my best to answer them the best I can without being too specific (it's a small industry), always happy to try and give any advice if I have it or point someone in the right direction.

Comments (18)

  • Operations Analyst in S&T - Comm
Mar 9, 2021 - 5:16pm

Would prefer to keep it as non-specific as possible, my desk is focused mainly in the Midcon Rockies/Upper Midwest/Northeast/Canada regions but also a little in the Gulf/Texas. I can often times be anywhere from 25-40% of the GDD + FP volumes on the specific hubs I trade depending on how much we've decided to take into cash on the month, how the markets trading on the day, and our specific t-port spreads.

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Mar 10, 2021 - 11:08am
nattyphizz, what's your opinion? Comment below:

What a time to be a live if you were trading midcon/rox cash during the last cold snap.  How was that, and as a new cash trader I imagine you learned more in that week vs years

Aug 12, 2022 - 3:40am
Steve0z0, what's your opinion? Comment below:

How and where can one learn more about the specifics and fundamentals in gas? I've got all the resources I'm sure, although so much time gets lost in the beginning when you're wandering out on your own... Think what would John Arnold do? 

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  • Junior Trader in S&T - Comm
Aug 12, 2022 - 11:46am
Steve0z0

How and where can one learn more about the specifics and fundamentals in gas? I've got all the resources I'm sure, although so much time gets lost in the beginning when you're wandering out on your own... Think what would John Arnold do? 

If you're asking books there's not really much. Trading Natural Gas by Fletcher Strum and Natural Gas Trading in North America are only two that come to mind for me. They'll get you a basic understanding of physical natty but nothing too in depth.

The EIA/Platts/Genscape/Bloomberg/ISOs will have all the data you'll want. I'm no analyst so won't be of a ton of help building models/extracting data as I mainly just use the end values complied by our analysts in my trading decisions. You'll most likely want to start with building a s/d model using 2 month lagged EIA data published on their website as a starting point (I.e prod/rescom/power/industrial/import/exports/pipeloss etc.) You'll also really want access to some sort of weather provider. After that you can try and forecast future prints by tweaking assumptions/inputs given your real time data scrapes and views.

You can also compare your model to a platts or Bloomberg and see where they're forecasting vs what you're modeling.(higher production, lower power burns etc.) and how they're arriving at their EOS numbers.

Twitter is another good resource for following different analysts and traders and keep up to date on news and market views. Every once in awhile you'll stumble across a really good piece or insight.

It's hard to really learn a lot without actually being in the thick of things but that should get you started.

Aug 15, 2022 - 12:57am
Steve0z0, what's your opinion? Comment below:

That's great! You went from scheduler to trader in 3 years and have analysts do their part in presenting you information? 

What's the difference in skillset/knowledge foundation between a trader/analyst, and what were some basic skillsets required to be a scheduler? 

  • Intern in HF - Other
Aug 12, 2022 - 11:17pm

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