I’m a jr gas trader here trading physicals/cash. Is it worth going into basis/financial trading?
Financial trading really interests me, but trading cash is fun as it’s quite logistics heavy. I’m also only 2 years into my career
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I also trade physical cash natty and schedule too. Took me little longer than you to start trading cash though ~3 years so 2 years is pretty good congrats! I feel the natural progression (at least in my experience/my desk) is to move further out the curve and eventually into purely financial. Most of what I do frees up the more experienced traders to focus further out the curve and on more spec/financial trading. Many of the older guys on my desk would rather not be bothered with the day to day meat and potatoes "running the business" stuff (and the logistical headaches that come with this) and would rather just trade the screen. Of course it's not a requirement to do so plenty of guys still enjoy trading phyz.
thanks my man! Yeah my senior trader has told me that he’d like to eventually pass on his phys book to me and the other cash traders so he can focus on more term/spec trading - be it physical such as transport deals or financial trades too. Good advice
Why not do it all?
The best guys at Citadel, Hartree, etc. trade same-day physical all the way out to cal 2025
Once you get into a purely financial spec trading role you miss out on all the information flow that comes from being in the trenches
agreed. Nothing is more “boots on the ground” than cash trading. Sometimes though, I feel like there’s some mundane aspects of phys trading but I guess grass is greener huh? Thanks man
Mr T and Natty are spot on.
I agree, I trade cash right now and if definitely gives you more granular info about pipeline flows than if you were purely trading basis. I’ve also heard many times from different people that’s it’s easier for a physical trader to move into financial trading than vice versa, take that as you will.
Personally, I agree that sometimes the doldrums of trading cash when there are no spreads and you’re getting excited about a 5 cent spread can sometimes get rough, but the logistical knowledge that you get will set you up for times like this past February where you are making a 50 dollar spread in cash.
Agreed, yeah sometimes with mild weather weeks or just slow days I am not super ecstatic about the 5 cent spreads - just doesn't have the same exhilaration. But you're right - it's setting yourself up for the bigger spread days.
It depends what kind of trader you evolve into. The few guys in the industry who are super senior and trade their own cash, do so cause they focus mainly on one hub and buy assets around that hub specifically. So they like to control their own destiny.
Others who choose to look at various regions and s/d’s prefer to focus on how to trade various basis portfolios.
Even the latter group have lots of positions in cash still, but they take the print and let junior staff optimize the book on the day.
So you want to be a guy who trades waha 365 days a year. Or a guy who trades waha in may, chicago in dec and pge in q3 sort of thing.
Hmmm, yeah that's interesting. Did not know that - guess that's because I'm nowhere close to the senior level lol! thanks man, that's good advice. A drawback of mine that I feel hinders my true potential in cash is that I never scheduled - I was just a market/trading analyst for some time before being bumped up. Is that gonna be a long term obstacle in my way in trading phys?
Nah never scheduled here. But many times was polite and took time to literally see what the scheduler screen looked like or asked to see their excel sheet and looked through it. You may not know all the tricks but if you are polite a good scheduler will always help answer your questions fast. The other source is once you been doing it a while friend pipeline reps. Pipeline reps are sales folks so they will listen to all your questions and if you start asking things like hey what if i want to flow the pipe all backwards they may just say “i will offer you that for xyz cost..”. Just prepared if the idea has merit the dude is calling 3 other large shops the next day to get everyone looking at it.
You want to be the guys trading Z6/AGT in Q1 2014 and Feb 2015, Socal CG/PGE Cal 18-20 and waha during Cal '18- Mar'21
A lil bit of what you said went over my head haha. mind elaborating please?
Those have been the big markets during my career
Some have been lucky, or unlucky enough to trade all of those markets during the crazy years
Cant forget Sumas during 2018-2019!
Wait a minute...
TXOK during the ERCOT meltdown did not make the list?
Kidding.
Quick anecdote about AGT in 2014.
I was long a fuel based rainbow option for some size vs a hedged powerplant.
Couldnt get a cargo into Everett, AGT was a horror show so I ran it with 2 and 6 oil...and still made money. Burned through my environmental permit hours, but still...
Hi Doug - what are environmental permit hours?
Hah the first PV, 2014-2015. Midwest Vent went over AGT even. Cove was bringing in cargoes gong sho times.
Permit hours, means the cap you can run bad fuel before you anger the government. So if you use them all jan-feb cant run Oil as heavy later in year if ever.
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