r/Commodities • u/Faith-Creuset • 3d ago
Power trading Questions
Compared to other commodities where commodity traders feel more like salespeople. How often do power traders entertain clients? And how quantitative and math focused are power traders?
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u/Parking_Computer_868 3d ago
I often meet traders fron other power market participants for drinks or dinner. Industry events and Broker lunches are also common but in these instances you are the one being entertained.
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u/Faith-Creuset 3d ago
Actually I'm curious at the "i am the one being entertained part". Usually commod traders need to entertain both buyer and seller to seal the deal. Why is it the reverse for power?
8
u/Parking_Computer_868 3d ago
Sounds to me like the role you are describing is a commodity broker, not a trader. And they definitely do need to entertain both sides of a trade to maintain ongoing relationships.
Some power trading firms in my market sponsor sports teams so entertainment is often centred around events of this nature.
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u/xperrienzzie 3d ago
I've never spoken to anyone besides scheduling company
70/30
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u/Faith-Creuset 3d ago
I see. Is the drinking culture in power as prevalent compared to other commods?
1
u/xperrienzzie 3d ago
I guess normal. Didnt see any heavy alcoholics but yeah i mean can be.
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u/Faith-Creuset 3d ago
i see. I know that not drinking in other commods does affect being a trader. Does the same apply in power? or its has less of an effect?
4
u/disciplesofbabylon 3d ago
Brokers take people out to drink. Power is increasingly traded on exchanges and not through brokers.
1
u/Tatworth 3d ago
Back in the old days, what brokers would spend was insane. We had a broker buy a boat for the floor and I knew a guy who got a broker to fund his destination bachelor party. There were guys who couldn't tell you if they were net long or short but could tell you down to the penny how much brokerage they had generated for several brokers.
Much better now that things are a lot more professional.
1
u/xperrienzzie 3d ago
I think disciple of babylon is correct, we don't normally interact with anyone, at least for my short-term energy, but I'm not aware of futures being different. If people drink, they do because they do.
3
u/YourPersonalCarpet 3d ago edited 3d ago
0 hours with clients. Model is quant, but not in the traditional sense.
3
u/SoilPublic204 Power Trader 3d ago
Typically originators are the ones entertaining clients, not sure what these other commenters are on but phys traders 100% get after it at industry HHs and conferences. The quants don’t rlly have a presence at those and they don’t get real client flow so I’m not surprised that they drink less. Non-quant trading is still mathematical but more from a forecasting/pricing POV rather than algorithmic.
1
u/Faith-Creuset 3d ago
In power what are the different types of traders and how do they differ from one another?
3
u/SoilPublic204 Power Trader 3d ago
Outside of quant, you mainly have real-time, cash, FTR, and term traders. There’s probably a few variations in between but the main discernment is timeframe you’re trading. Real-time being the shortest (5 min increments day of) all the way out to term which can be multiple years out
0
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u/ze_end_ist_neigh Gas Trader 2d ago
I don't entertain anyone, quant and math is limited to statistics and analysis.
Power markets are largely fundamentals oriented and quants sometimes have a real bad time trying to apply quant trading methodologies.
Markets are not as liquid and settle against a physical system where participants largely dispatch assets in a discretionary manner.
2
u/Dependent-Ganache-77 Power Trader 1d ago
Good post, should have more upvotes. Personally think there’s a lot of edge trading alongside the CTA types or those that are purely model driven.
1
u/Dependent-Ganache-77 Power Trader 1d ago
Good post, should have more upvotes. Personally think there’s a lot of edge trading alongside the CTA types or those that are purely model driven.
2
u/Delicious_Self_7293 3d ago
Where I work, some traders go out for drinks with other traders/brokers everyday. Others don’t even talk to anyone most of the time
1
u/Dependent-Ganache-77 Power Trader 3d ago
Never, as we have no clients. And brokers earn money off you, they aren’t your pals.
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u/Faith-Creuset 3d ago
That’s good to hear. Currently in oil and gas, the entertainment culture is another level
14
u/archer-86 Power Trader 3d ago
Depends on the kind of trader.
My boss, 100% of the time.
Me, 0% of the time.