Power traders, also called energy traders, work for energy companies. They
work in three main areas: long term, short term and hourly. These positions
cover all aspects of trading, from what gets traded at any given hour to what
an energy company plans on trading a year down the road.
There are two types of energy trading: the trading of physical commodity
products for oil, natural gas and electricity, and the trading of financial
products. The work is much like the frenzied scene on the floors of the New
York Stock Exchange.
Although traders essentially work alone -- making phone calls and trying
to figure out where the market's going -- they have to be able to communicate
well with others on the trading team. These other members often supply them
with valuable information such as mathematical analysis.
"We work with them to find a position and negotiate for it," says Paul
De Martini. De Martini worked as a power trader for years before moving into
a management position.
Computer skills are becoming more necessary.
"Somebody needs to have some pretty solid working understanding of how
to use Excel files and things like that," says De Martini.
People in the field say it takes an understanding of two things to be a
good power trader: supply and demand fundamentals, and the psychology of the
Supply and demand is a basic principle of economics. It says that when
there is lots of something (asphalt, for instance), it is not worth as much
as something that's rare. On the other end of the scale, diamonds are worth
a lot because there are very few of them.
The psychology of the market is a little harder to describe. Here is an
explanation provided by De Martini:
"Sometimes small movements in fundamentals tend to create maybe a more
dramatic psychological change about the view of the market, and tends to amplify
that small move into a much bigger move than anybody would anticipate."
He says that the good power trader will be able to read and react to both
the financial and the psychological aspects of the market.
"Trading is a pretty intense profession," De Martini says. "It's one that
typically you don't see a lot of people beyond their early 30s still doing
actively....They tend to migrate into supervisory or more senior [positions]
or into the marketing areas."
The work is not too physically demanding. Most of the day is spent behind
Buy and sell resources for energy companies