AMA: I'm a real-time power trader

F430's picture
Rank: Senior Baboon | 213

A little about myself, graduated 2 years ago from b-school in the northeast with a finance degree. Originally had planned to go the Asset Management route, passed CFA Level I etc, wound up in the power trading industry after a internship and got a full time gig shortly after. Ask away.

Comments (55)

Jul 12, 2014

Strong username, plan on buying one soon ;) ?

Any advice for landing a power trading internship? Do you think having an engineering degree could help me land an internship in this field?

Best Response
Jul 12, 2014

-haha maybe when they've depreciated enough

-as far as landing a internship, network your ass off, hit up alum, apply to every position that is relevant to power trading. look for load forecasting analyst positions, risk, commercial ops, anything to get your foot in the door really. one thing i would highly recommend is learning in great detail how power markets operate. you would make a damn good impression if you could tell me how LMP's work, how power physically flows on the grid, generation stack, how generation is dispatched, etc. all the ISO websites have great free training videos that go over this in great detail. (PJM MISO CAISO) it's embarrassing how many traders i've worked with don't know how power physically flows.

-i think an engineering degree would help a lot, the more quantitative your background is the better. every trader position i've seen requires a finance/economics/engineering background

    • 3
Jul 12, 2014

I know these have been discussed in the past but:

1. What is a good way into a real-time trader position? (I'm guessing most utilities, let alone trading firms, would like you to have some experience)

2. What is your schedule like?

3. Where do you want to go from here? Day-ahead trading? Origination? Different product altogether?

Jul 13, 2014

1. scheduling is the best way to get into trading, but even those are hard to come by straight out of school. it is true that most want experience, you'll have to work your way up from BO/MO. once you have your foot in the door, even if it's not the position you want, it's all up to hard you want to work to become a trader.

2. 5 week rotation

1. mon-thursday 6pm-6am
2. mon-wed 6am-6pm fri-sun 6pm-6am
3. thurs-sunday 6am-6pm
4. 7 days off
5. mon-fri 9am-5pm (support week)

3. that's a great question. i'm trading west power now, but i'm much more interested in trading east power, so i'm trying to move into roles that trade pjm miso nyiso neiso. it's a much more liquid and volatile market with way more opportunity than the west imo. i also want to move into trading financial products (ICE Cash/virtuals) some power markets in the US are not structured, so its the old OTC market. can be quite boring.

    • 3
Jul 17, 2014

how do you deal with the change to your body clock? I'm find working a 12 hour day, but if it was 7-7 the other way I'd be fucked I would think. I would think you'd need copious amounts of adderall and melatonin (not simultaneously mind you) to get through this. curious as to how you maintain your health with this crazy schedule

Learn More

Boost your resume and land a finance job by passing the FINRA SIE. 264 pages & 1981 smart flashcards written by a former 8X top Fidelity instructor. Try it for 0 bananas here.

Jul 12, 2014

Serious and not-serious:

1) which b-school? If you don't want to be specific just give us a tier (HSW, m7, top 15, whatever).

2) how do you feel that your name is f430 when there is a far superior 458 available?

Jul 13, 2014

1. top 20

2. 458 is far superior in performance, F430 is the most beautiful and elegant car ever made

Jul 14, 2014
F430:

1. top 20

2. 458 is far superior in performance, F430 is the most beautiful and elegant car ever made

Disagree. 360 is prettier. 355 sounds better.

Jul 12, 2014

Do you need an intern?

"The way to make money is to buy when blood is running in the streets."

-John D. Rockefeller

    • 1
Jul 13, 2014

not just yet ;)

Jul 12, 2014

nrg??

alpha currency trader wanna-be

Jul 13, 2014

no but they are a great shop. they're the first to really start investing and focusing on the retail side, as well as creating a energy product that is more than just the commodity itself.

Jul 12, 2014

How much math is involved? What's a typical type if problem, buy that you would do? Are you trading all futures contracts? Are you at a utility, bank, ferc, or what type of power-gas, electric, oil?

Jul 13, 2014

-depends what product you're trading, on the hourly desk nothing more than basic arithmetic. need to be fast and quick with numbers though. if you're trading FTRs and transmission products you might need strong math and programming skills.

-i'll often call my counterparties and see if there is cheap power i can purchase rather than generate myself. if my gen cost is $50 and there's a $40 market out there, ill buy as much as i can to bring my generator to the bottom. if it's a hot summer day and i dont have enough of my own generation, i'll have to purchase to cover my load. this is the Asset Management side of power trading. we can also speculate and import/export with ISOs.

-utilities/co-ops/munis/industral load.

-from a trading standpoint we dont care about what type of source it is, a MW of energy is a MW of energy. a pure commodity.

    • 2
Jul 13, 2014

nights can be real slow, keep the questions coming

Jul 13, 2014
F430:

nights can be real slow, keep the questions coming

I feel you... nothing worse than spending 12 hours in front of a computer and not flowing anything :-/ Super quiet summer here in Europe...

Jul 13, 2014

so..i dont have a STEM background but i work as a data analyst and am familiar with machine learning techniques, some SQL, python ,etc ....

Im not the kind of person who can sequence numbers or do long division in my head..so do i have a chance at all?

alpha currency trader wanna-be

Jul 15, 2014

who ever said you need to be able to sequence numbers or do long division in your head to trade energy

Jul 26, 2014
F430:

who ever said you need to be able to sequence numbers or do long division in your head to trade energy

alot of option trading firms have tests like this

alpha currency trader wanna-be

Jul 13, 2014

This is a new area for me, so forgive my ignorance;
- What are the high seasons and how do you prepare for it?
- How do you make the time pass by when you're having a slow shift at night?
- What is the average span of a traders career in that sector? 10 yrs, 35yrs?

Jul 15, 2014

-winter and summer are the busiest times, basically when there is the most demand for power

-research different markets

-it can be as little as 1 year to an entire career, depends if this is something you enjoy and want to do long term

Jul 14, 2014

-Pre rooftop solar, west power was not all that boring in real-time, not at all. Especially with the year mr. songs went down.

How is the dating life, do you find nurses with similar shift patterns?
How you deal with all the time off and alone?
Do you ever not wear pants on a slow day? One of my goals is to not wear pants one weekend at the office when I am on-call and forced to come into the office.

Jul 15, 2014

-the demographics of the city is not to my taste so pretty much non-existent
-research markets and travel travel travel
-can't say that i have...

Jul 14, 2014

I work in the field and have some questions for you
- What would you say would be good learning materials (books, etc) would be besides the ISO videos and slides
- You say you trade in the west so how has the penetration of renewables effected your trading?
- How do you see the future of renewables effecting your trading (specifically the CAISO duck curve)
- Do you recommend any industry conferences to attend (I know platts has a huge shindig in vegas but I was wondering if there was anything else you would recommend since alot of these are shit/just a place to throw around business cards

"Hold on to your butts"

See all my other WSO posts here

Jul 14, 2014

hey, good to see you back on WSO, hope all is well

WSO's COO (Chief Operating Orangutan) | My Linkedin

Jul 15, 2014

-Energy Trading and Investing by Davis Edwards

-i personally dont manage any renewables units, but i trade with plenty of people who do. obviously subject to short term weather forecast deviations so it can be tricky trying to trade around it. renewables will inevitably play a larger role in the future and i think the grid will play more of a balancing act. any time you add generation and transmission lines to the grid, the topology of the system changes. renewables also can add considerable congestion to the grid.

here's one perspective http://www.businessinsider.com/green-energy-isnt-c...

-nodal conference and bloomberg holds energy events, ISO's as well.

Jul 14, 2014

1. How's the compensation?

2. Career Path/Exit Options?

3. Are utilities a good place to start out at? I've been interested in the past and I have contacts on the trading desk of a large utility here on the west coast.

Jul 15, 2014

1. differs largely from shop to shop but they all pay well. look it up on glassdoor

2. many options, you can be a consultant, quantitative analyst, origination, sales for market data software, endless. i personally want to stay in trading, love the fast-paced environment, developing strategies, and most importantly the intensive research

keep in mind "Real-Time" itself is such a vague term. you can trade on the hourly desk doing shift work, you can trade real-time financial cash on ICE, options, you can trade financial products like virtuals and up-to that is essentially a combination of trading in the day-ahead and spot market and arbitrages the spread to converge prices, resulting in a more efficient market

3. utilities are a great place to start out. while everyone would like to trade power for a BB cause working on wall street sounds sexy, it's extremely hard. i was talking to a bank trader (GS MS JP) and he said the second there's an opening on the desk, there's a hundred internal applicants before it even goes out to the public. leverage the hell out of those connections, anything to get your foot in the door.

Jul 14, 2014

Physical or financial?

Jul 15, 2014

physical

Jul 14, 2014

I traded the east and happy to provide an outlook from a different iso

Jul 14, 2014

How much do you think an oil trading background would help with power? I'm guessing the risk management will be quite a bit different due to the big intraday price changes in power.

Also, what kind of compensation packages would come with analyst/scheduler/risk/trader roles? I'm sure all are pretty variable, but would appreciate a swag at the numbers.

Jul 15, 2014

-i think it would help immensely, what interests you in going from oil to power? you are correct on that, risk management and the volatility of the markets is completely different due to the instantaneous production and consumption of energy, and the fact that power cannot be stored.

name me a commodity that can go from $80 to $2000 in one hour. generators are large man-made machines that will (and often do) trip. on a hot summer day when your supply is cut short like that... good luck.

Jul 15, 2014

Without having worked in power before, it has mostly just been the parallels that I can see from the outside and a general interest in the commodity markets (moreso than equities). I'm currently in the process of getting an MBA in Ann Arbor and it seems to me that working for someone like DTE or Consumer's Energy would be about the only way that I would stay in this area.

Jul 15, 2014

I'm currently working as a "real-time trader" but my desk doesn't trade bilaterally. What should I focus on that would better prepare me for a desk that does?

Also, could you elaborate more on your research process? What are you primarily looking at? Market rules? Historical RT prices?

What tools do you use on a day-to-day basis? YES Energy? IIR? Genscape?

Jul 16, 2014

what makes you want to trade bilaterals? and what markets are you trading now?

-historical prices, transmission constraints, outages, load

-i mostly use YesEnergy

Jul 17, 2014

It's not that I necessarily want to trade bilaterals. It just seems more hands on, so I'm wondering if it requires a different set of skills.

I'm in MISO and PJM.

Jul 8, 2015

Try out Innotap - best platform for real-time energy trading. Innotap is high performance compared to Yes which is basically an FTR analytic's tool that added a "view" into their database which they branded a "dashboards" but their performance is not up to the speed of Innotap which uses a proprietary connection (not a public web
connection).

    • 1
Jul 16, 2014

Do you see people cross over from market risk to trading?

Jul 16, 2014

i have seen many people cross over from market risk to trading, many of my counterparties who are now trading started out in risk

Jul 17, 2014

For someone who is interning in BO/MO do you think it is worth sticking around to eventually get into a FO trading role? I mean if your with a big 6 OG firm it can take 4-5 years before you get that opportunity (depending on your performance of course).

Jul 19, 2014

apply for front office roles at other shops while trying to get into FO at your current shop

Jul 19, 2014

I'm looking at making a transition into energy trading. I currently work for an electric company, I've obtained a MSc in Energy Management, and I have made good connections with that side of the company. Two questions.
1. Can you help me understand what it means to work in "Origination"?
2. Have you seen people enter directly into Day-Ahead trading, skipping over real time trading? Reason for asking, I'm not afraid of hard work and weird hours but I have two boys and I coach their sports teams, therefor I have to have a fixed schedule.
Any info will be much appreciated.

Jul 28, 2014

1. long-term deals and contracts
2. it is possible to do so, i know people that were previously analysts and then went straight to trading financial

Jul 29, 2014

Great topic, and appreciate you tossing this out there.

Jul 29, 2014

glad to help out

Nov 4, 2014

If you are hired as an real time trader at an IPP, how big is your book? For example, how many MW's would an entry level RT Power Trader be responsible for trading, to be specific at an IPP?

Sep 14, 2016

what is the bonus structure ?

Sep 14, 2016

Do you feel that passing even just one level of the CFA opened or will open any doors?

Sep 24, 2016
Comment
Jun 8, 2017