Power Trading: Virts/FTRs to Longer Term
Hi all,
For some context, I'm currently in a role at a power prop shop trading virts/p2p and some FTRs. I absolutely love the industry, and the work (more so the FTRs than virts but I don't know anyone who would think the opposite lol).
I've always been intrigued by moving further out the term structure, trading more than just next day or monthly/annual FTRs. I'm curious if anyone on here has had a similar career path, starting in RT/Virts/P2Ps and moving into FTRs or term products (12-24mo out max), and if so what the experience was like. Is there more/less opportunity in the term products? How different is the analysis, trading, and opportunity in something like FTRs versus trading energy or basis products on ICE?
I'm also curious if anyone has experience going from a small HF/Prop Shop to a larger HF/trading house, and what the experience around culture, risk size, comp, etc was. I started my career at a smaller shop that trades mainly Virts and FTRs and so I'm not sure how other firms are structured and operate in the space.
Based on the most helpful WSO content, here's what you need to know about transitioning from trading virts/FTRs to longer-term products and moving from a small HF/Prop Shop to a larger HF/trading house:
Career Path and Experience:
Progression in Trading Roles:
Learning and Skills Development:
Differences in Analysis and Trading:
Opportunities and Challenges:
Transitioning to Larger Firms:
Culture and Structure:
Risk Size and Compensation:
Additional Tips:
This information should provide a comprehensive overview of the transition from trading virts/FTRs to longer-term products and moving from smaller to larger trading firms.
Sources: Refined fuels trading experience but lackluster Engineering GPA, energy trader, do I move?, Energy Trading: Career Path, Lifestyle, Wages, etc, Transferring Commodities, Physical Commodity Trading Offers: Hartree Partners Vs Castleton Commodities International (USA)
Most of the big hedge funds have absolute shit technology (trading execution, risk, etc), and are very bureaucratic. Before making the move truly ask yourself what you really need to be successful elsewhere. Every recruiter and BizDev guy will tell you that their firm has the best tech/talent/setup but in reality that’s far from the truth.
Agree on the recruiter piece of this, haven't met one who hasn't tried to sell me that some random firm has a cutting edge tech stack. However, I'm not sure how applicable this is to commodities, particularly energy/power. Most of these trading houses/HFs have had commodities arms for a while (trading phys or financial) and have pretty mature setups. Even at my current place, there's a relatively mature tech stack, although some newer data sources have to be built out by the traders.
I'd be more concerned with the bureaucracy and org structure. From what I've read on here and gathered from talking with colleagues, a lot of trading houses and HFs in energy are relatively flat (which is a nice thing personally) and aligns with my current firm.
Curious, what’s your background?
I’ve got more of a traditional finance background, studied Econ in undergrad. Worked in asset management before any exposure to the power markets.
Can I DM you?
Yup, would appreciate it.
Reprehenderit esse culpa beatae fugiat dolores odit voluptas. Harum labore omnis sed voluptas suscipit culpa eos.
Fugit aliquam laboriosam et mollitia ab nihil quia. Nihil eligendi enim id at enim corrupti enim. Veniam vel maxime ab nisi. Autem inventore placeat odit ex est enim. Earum reprehenderit dolor aut accusamus aut temporibus minima incidunt.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...