Small Energy Trading Prop Shop vs Management Consulting
Senior in college with a degree in physics from a large research university. I have an offer from Accenture and PwC both in their management consulting arms, and an upcoming final interview with a small prop trading firm that goes by DC Energy. They trade FTR's and are pretty small with around 60 people. I really didn't have any knowledge about energy trading before this but it seems to be pretty analytical and at least interesting. I really value technical work which is why i'm leaning towards something that affords that opportunity. The problem is exit opportunities. Moving to DC is a big commitment, and it would be a big gamble if I found that I disliked the work there. There is also a pretty strict non-compete, which from what Ive read from glassdoor, bars working in trading for 2 years. Salary with accenture is 80k, salary at DC would be comparable 80-90k (glassdoor) with bonus around 30k from what ive read. Ill be honest and say I don't have any experience in either of these fields, but really just want to be interested and passionate about the work i'm doing. Long term goals are just centered around making a lot of money in the least soul crushing way as possible.
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monty09
FTR is quite niche and the turnover is high in that market. Do some reading up on what you can find online... they are very large in PJM and MISO and a very good shop.
thank you monty. Can you comment on exit opportunities and the non-compete if you have any knowledge about that?
exit oppts are prob to start your own fund(very common in FTRs) or stay and keep getting paid. I would never advise anyone - student or professional - to enter trading for exit oppts. It is just a different animal than your traditional finance roles.
the non compete is to protect the firm not you. Unless you are a rock star i wouldnt look into it that much.. sad but true
Management consulting offers a handful of entry points -- straight out of undergrad, post-MBA, and coming in from industry. Comp is a bit more predictable and structured, though there's no telling who/what/where the next client or project might be.
energy trading often has fewer and less well-defined entry points, so getting in mid-career can sometimes be tricky without hitting restart. Comp varies more, but because PnL-related bonuses can make up the majority of pay in front-office trading roles, the potential upside is quite large.
My two cents -- give energy trading some serious consideration and keep consulting (perhaps after a trip to B-School) in your back pocket as Plan B.
thanks for the info. Do you think this kind of firm (if you have any knowledge about them) translates into work experience with some of the more traditional trading firms in Houston (centered around O&G)
monty09 is more well-versed when it comes to such things, but moves from shop to shop are certainly things that happen, especially within the same commodity/product. Look up folks in front or middle office roles at various places and you'll see that movement is certainly a thing.
no
If the energy prop trading is run by Bill Perkins - than I'm taking the energy trading offer.
PERKI LIVES
50/50 at best
Literally, he just seems like a cool ass dude to hangout with
Watch the "Mark Fisher ACD" videos on youtube (there are 6) to help you figure out if energy trading is for you. Fish is a legend in energy trading, and well worth the time (they are fun to watch if you are into tradin). If these videos don't give you a hard on for trading, then go for mgmt consulting.
agree
I work with some alums of DC energy so can speak about their people a little. In general they are smart and have a rigorous technical background, and they have a good mind for trading. We are in the equity options space so clearly there is room to lateral out of energy trading in particular.
DC is arguably the best firm in prop FTR's. Every time I look at YesEnergy for shits and gigs, they are usually one of the top market participant for every ISO in terms of PnL. From what I have heard they are quant heavy...not sure how strong their non-competes hold up. With cheap gas, and renewables penetrating the power market I am personally bearish price but bullish congestion. FTR trading is a bit different, if you are not comfortable analyzing massive datasets, its prob not for you.
In general MC and trading are different beasts, I suggest you evaluate your personality and what you think you want you career to be like
agree 100%.... they are heavily deployed in all the major iso's.... they dont lose their stars because they offer a very aggressive pay package.... however becoming a star in ftrs or up tos is not easy
Hell nah its not easy... i only know 3-5 guys who have set-up their own funds in PR/Cayman Islands to trade at their house with little to no income taxes...I'm sure you boys know a few of them
But all said, nah not that many people are successful, but i think it could also be that those that do, keep a low profile in bum-fuck nowhere so no one ever mentions them, thus the industry chatter doesn't include those lowly ftr/up-to guys
Proprietary Trading VS Human Capital Consulting (Originally Posted: 03/11/2013)
Hi Guys,
I have two summer offers: DRW Trading in NY Mercer Human Capital Consulting
I go to a top B-School but have found a clear passion for organizational behavior and design which has led me to the Mercer offer. I am also much more interested in consulting and will most likely want to pursue MBB for FT. However, I am quantitatively sound and enjoy the prospect of trading and think that a summer trying something different may be beneficial. Particularly with higher pay, DRW is definitely enticing.
I guess my question is will DRW prevent me from FT consulting recruiting? My second question is should I just do what I've always thought I would really enjoy doing and accept Mercer?
Take DRW in a heartbeat
DRW is solid. I'd risk it. They pay well (at least in Chicago - not sure if they have other offices or not).
If you really want organizational change, go with Mercer.
Mercer
summer trading prepares you for trading post MBA... does nothing to help you to interview for MBB next year....
I would not risk it.. your risk is that you went to a top MBA to get a job at a prob shop.... not a good trade if you ask me
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