Trading Power at a Utility
Can someone give a description of power trading desks for utility companies. Are utility companies strictly trading to hedge holdings/make sure there is enough supply for the coming months, or is there also trading for profit going on? Since utilities are so regulated, I would think trading for profit would be frowned upon.
What's the typical salary for a power trader, how much of compensation is linked to how good of a trader you are? How hard is it to break into these jobs? Thanks.
Monty09 will give you the best answer on this
45-200k base, depends on firm, very hard
where did all the bb traders come from? UTL, were did most go back to? UTL
were the BB traders able to make BB money trading for utilities? What's the payment structure like at the utility? Are they trading for profit there, or are they just learning the ropes at the utility and then trading for profit elsewhere?
real question would be were the BB traders able to make BB money at the BB? when your CDO departments loses billions your group may not get paid out the way you thought.
Your learning the ropes where ever you are if your a new grad.
I appreciate the responses, but maybe I'm not being clear in my questions. I understand that a Utility is a great place to learn about power trading, but what I'm trying to figure out is what is the potential to earn $$$ while working at the Utility. What is the payment structure like at most utility companies?
Also, is the trading at utilities mostly hedgeing? Do they even trade for profit there?
your potential is the same anywhere. you have to earn... you can fail at a utility the same as a bb.... people here seem to look down on utility and make a bb look like god...
FYI.. i work at a utl and make more then my counters at bb's... i left a bb for a utl
take it for what you want
A large part of utility trade from what I experienced is hedging and guaranteeing long term supply of what is needed in raw products for the various power production assets. My company in particular that means natural gas and coal and hedging that risk with various derivatives. Natural gas is used primarily for peak shaving, which leads to some interesting prop trade opportunities.Other than that i have experienced a lot of brokers dealing with local utilities and large customers to get their long term supply and there is some short term dressing where getting the best deal for your customer starts, most of the baseload is covered long time in advance. A power trader day at my company (working student at german utility, freshmen in engineering) looks like this :
8:00 Traders roll in to work. Analysts already have done a large part of their daily work and provide traders with the materials needed for the trading day by 9 at latest, a large part of that is meterology, how much wind power, rain and so on.
9:30 Customers start calling in, munis, power stations and other traders for their loads that they want to buy or sell for the next day, broken down into hourly trading blocks. That data has to be filted in for the two exchange prices
11:00 APX prices get nominated, EEX one hour later and by 12:35 prices for the next day blocks are set. Now the entire package has to be untangeled again into the individual load for every customer.
14:30 By now you have to have booked the transmission lines with the operator so power can physically flow the next day.
15.30 Analysts meet with traders and porfolio managers and analyse the daily operations and overall issues, long term trends and indications.
Theoretically power can be OTC traded 24/7, which happens in emergencies, forced shutdowns at utility for example and now substitute power has to be brought in. Then it can range late into the night.
Great comments guys. Thanks for the info.
Utility Trading Desks (Originally Posted: 03/30/2010)
Not sure if this was already mentioned (couldn't find a topic, while using the search tool)
But is there a comprehensive list for the trading desks at utility companies like Con Ed or PSEG in the northeast and their contact info. I see that they have website like PSEG Trading, but no information on who to contact or even apply to on their career website.
Background: BS. EE degree, concentration in Power & Systems, 3 years of engineering in #1 design/EAC firm, 700+gmat score, debating between S&T or Consulting.
Interested in trading, had a personal trading account since 99' when I was in high school. Also had an internship with one of the RTOs in college (the power regulatory agency that handles energy trades kinda like NYSE).
Any help would be appreciated.
Northeast would be preferably the best location, but Chicago and Houston are also huge in commodities from what I've read here and elsewhere.
Assuming you want to trade power, PSEG and Con Ed (as you mentioned)... NRG Exelon Constellation Sempra/Noble Barclays Goldman/j.aron
I would go through the ISO/RTO member pages for PJM/NEPOOL/NYISO and look up the ones that sound more regional. --- http://www.iso-ne.com/committees/nepool_part/sector_roster.pdf
Hell, if you're unemployed, look them ALL up...
For power, I wouldn't necessarily say CHI is better than anywhere else. There are a few financial players there, but that's about it. Most of the players with major skin in the game are in HOU or NY-area (with the exception of a few notables).
second this info
Thanks for the information. Do you know how they recruit? I didn't see anything particular say for PSEG or Coned on their Career Website.
Working for a utility ain't super interesting. The shops oversold named, would be where you want to be.
Prop Trading at a Utility (Originally Posted: 01/16/2013)
Can working on the prop desk at a Utility/Generation firm leave you with great exit ops? Can one easily move to other hedge funds or the prop desks at IB's?
Yes, a very good friend went from utility trader -> HF
What space? Oil? Power?
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