Q&A: I’m a natty trader at a huge American utility.
Feel free to ask anything. I learned a lot from reading these AMAs so would love to keep the energy going. I will try to answer as soon and thoroughly as possible!
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skinnydak, bummer your thread hasn't had a response yet. Sometimes bots are smarter than humans anyways:
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Fingers crossed that one of those helps you.
Did you start your career at the utility? Any recommendation of specific utilities to get your foot in the door? Approximate base and bonus if you don’t mind sharing.
I started at a small trade shop after school but worked there for a small amount of time in Risk. Moved to my current shop for a front office market/trading analyst role and got bumped up to jr trader recently.
Regarding comp, we (along with a whole lot of other marketers) did really well during the winter storm earlier this year.
Comp or gtfo
What region do you trade?
Gulf. Pretty much everything east of Houston to West of Atlanta to South of Columbus, OH.
Do you see yourself at the Utility for much longer?
Do you think/ever realize that you know more about markets based on your experience than more seasoned traders at purely financial shops?
I am a junior trader here. Got bumped up from trading/market analyst a couple months ago. I plan to stay here to learn as much as I can about the business.
I think physical traders know more about the granular level of the market and can make more fundamentally driven decisions, whether they are term trades or cash/BalMo trades. Purely financial traders are just trading the screen and rely on fundamental knowledge but have to trade on technical strategies since almost all new fundy knowledge is priced in.
You have a lot to learn. Also not sure you are at a utility persay seems more of a merchant.
I don't really understand this. What's the difference between a term trader and a financial? last I checked 98% of basis trading is financial.. blame the Canadians for the 2%
whats your edge? did somebody teach you how to make money trading, or did you discover something on your own?
yeah I'd like to know what your edge is as well
Haven't really developed my "edge" per say, yet. Still working on it. Definitely being taught how to make money while trading right now.
How has the PHMSA ACAD btwn Kosci/Uniontown affected you this month as a Gulf utility?
Great question. Yeah the TETCO problems have made some discomfort for us in terms of moving gas around but in terms of our basis position, we aren't that financially affected.
Oh wow, that's kind of surprising you guys weren't too affected. Really making a tight South Central market even tighter especially with LNG coming back up. The 20% reduction and basis blowout was a nice tailwind at least for my desk this month.
What's been the most difficult challenge in your career so far?
DM me Juicy Elbows
How long do you want to be trading southeast/gulf gas?
What do you see yourself doing in a few years
I think SE/Texas (and STX)/ Gulf gas could be a great area to stay in for myself because of all the active moving parts in the area (more capacity coming online from producing areas, LNG guys, power load that is still predominantly gas powered, etc.). I also have only had experience in SE/Gulf - to be honest I think the Northeast markets are pretty interesting too. Wintertime economics up there get crazy as I've read.
Not too sure as to what I want to do be doing in few years. I think I definitely want to stay in the business though!
Thanks for doing this. What's your outlook on the future of cash trading - do you think it'll continue to be something that traders manually focus on, or something that can be boiled down to a set of rules and automated? I understand that you can get some market color from cash that helps with term trading, but it seems to me like the majority of what's done in cash is is just operationally-focused (barring extreme weather events like Uri/vortex).
I'm not too sure on that one. I think you're right - most of cash trading is very mechanical. Operations is a big part of it so I feel like the part of seeing how much gas can flow based on pipe conditions (OFO's, EPSQ, etc.) can be well automated for sure. I believe the economics/pricing part of the job can be quite automated as well - in fact, I've pretty much automated my own bid/ask pricer for same day activity. Not too sure about whether the term trading aspect of cash can be automated since a lot of RFP's and other methods to transact years out does have a personal touch. At least for now!
Hey I’m always curious about what books have helped you get to where you are and what you read on a regular basis?
Yeah for sure Fletcher Sturm's book "Trading Natural Gas" is great once you're in the phys natty space.
But as to other books I've read that helped me shape a different way to think and would be these 2 books:
1) "Freakonomics" (of course)
2) "Thinking In Bets" - Annie Duke
Read Fletcher Sturm's book.
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