Any Electricity/Power Traders

Hello,

 

I am looking to find out about electricity/power trader career path. 

career path, growth, exit options. 

What I like about the position is challenge, applying macro/business supply/demand knowledge and purely understanding the business of electricity. 

Hours will be much more brutal than what I am used to, but I can adjust to that. 

I checked few profiles of the other traders, most have been just trading for years. Didn't see too many MBAs (not that it probably matters). 

Currently, I am a middle manager at a utility. I can stay and move up the ladder slowly (utility is quite slow) but it can be rather boring..Educational background, engineer/MBA (not top-20). 

Appreciate!

 

 

Comments (5)

 
  • Analyst 3+ in HF - Other
Jan 14, 2021 - 9:26am

I'm not in Texas or power trading, but some friends are, so take what I'm saying with a grain of salt. A common path is being an analyst on a power trading desk and moving to a trading role after 3-7 years. Also, an MBA or other titles don't matter, just get your foot in the door. 

 
Most Helpful
Jan 14, 2021 - 12:26pm

Since I got my start in the biz on the regulated utility side, I'll throw a little effort behind this.  Right off the bat, be aware that there is a difference between being a trader at a utility vs competitive retail vs wholesale trader vs prop shop.  Depending on which one you want to do there are different skillsets and different "paths" (I use "paths" loosely b/c this is not a ladder game, its a right seat right time right skills game).  I'll try to lay out what I have seen as common paths in my career + taking into account skills that are often picked up in these roles that I think are important to being a trader (depending on many factors some of these might end up skipped, not be relevant due to what shop you are at, or combined)

Utility:  Rates (can be gas but power preferred) -> supply analyst -> real time/power plant ops -> cash desk trader -> term trader

Retail:  Pricing analyst -> desk analyst -> scheduler -> cash trader -> term trader

Wholesale:  Structuring analyst -> desk analyst -> FTR/Recs desk analyst (depends on type of trader goal) -> cash trader -> term trader

Prop shop:  Two options   A. (most common) Cash or term trader from wholesale/IPP  B.  (rare) Desk analyst/scheduler (experienced) -> cash trader -> term trader 

 

Exit options (not sure why everyone is always so obsessed w/ this around here):

Utility: Management/Senior Leadership (COO, CEO)

Retail: Desk head -> Trading head/Move to wholesale -> Senior Leadership

Wholesale: Desk head -> Trading head/Origination/Prop shop -> Senior Leadership

Prop shop: more VaR/Retire

 

A little about expectations as a trader by type:

Utility: Don't mess up cost recovery, long and wrong vs short and fired

Retail: flatten dat book, small sliver around deciding how/when to flatten (emphasis on small)

Wholesale: hedge out power plant per corporate policy, optimize/spec around market ops, facilitate origination/marketing by warehousing risk

Prop shop: spec

 

MBAs/CFAs/MFin/ERPs/etc. are not really a thing. Unless you are a quant then PhD Math/Physics/EE

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