what sort of energy trading does BB have

Hi,

     Would anyone happen to know what sort of energy/commodity <a href="/finance-dictionary/trading-overview">trading</a> does the <a href="/finance-dictionary/what-is-the-bulge-bracket-BB">BB</a> have. <a href="/company/goldman-sachs">GS</a> supposedly have more 20% of the commodities trading market, and a considerable portion of the trading profit comes from the commodities trading department, just exactly what sort of trading activities does these commodities trading department engage in? Do they do prop and get off the hook easier than equities prop desks that are been spin off?

THanks

3 Comments
 

Mostly paper, some physical but not as much. JP Morgan does a lot of market making in that area, and I think that's what most banks are going to be involved in. I actually don't know too much on this, but the majors and physical shops seem to own waaaaaay more assets to trade around than the banks in terms of energy assets, and the size of the physical market is much much bigger than the paper market, so...

 
Best Response

GS has a great oil desk but majority of their traders are ex-BP. They don't have any presence in physicals though. MS on the other hand has a dedicated physical desk that do both crude and refined products trading. BarCap also a huge player in commods, and JPM not far behind (acquired big LME steak post-MF Global and also bought some warehousing facilities from RBS few years ago. However they are lagging behind a bit in energy).

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