Additional Information
Most power traders have a background in finance, economics or engineering.
Many have an undergraduate degree as well as an MBA.
"In my experience, energy traders have a varying education level ranging
from engineering to business degrees and those that have started as system
operators with the technical expertise and developed the trading expertise,"
says Lucia Tomson. She's an energy trader.
"It's not easy to get into," says Wesley Allen, a power trader. "Definitely,
you've got to go to college, you've got to get a degree [such as] in finance.
There are some people [who studied] electrical engineering in energy trading.
Business and finance is [typically] the way to go. And then from there it
would be great if you could find a school that offers some classes in energy
trading."
One school that offers courses in energy trading is Texas A&M University.
Detlef Hallermann is the director of its energy trading program.
"You can start off with an undergraduate degree and do very, very well
and never feel the need to go any further academically," says Hallermann.
Hallermann says the most important qualities for power traders are intelligence
and a competitive spirit. Further education beyond an undergraduate degree
can lead to additional opportunities.
"The PhDs and the master's students, they generally end up in risk management
and valuing the long-term deals that somebody else is going out and working
with their counterparty on," says Hallermann. "You also have people that are
more accounting oriented, that don't like uncertainty.
"Those people are critical for managing the accounting side of the trade
floor," says Hallermann.
"[They manage and make sure] all the trades get put in the right positions
in the right books in the right structure. [And they make] sure that once
the trades settle -- meaning they come to fruition -- that the right counterparties
pay and receive payment.
"Those are tremendous opportunities for people that are more accounting
oriented to have the opportunity to work on a trade floor and have the opportunity
to impact the trade floor."
Internships are often the best way to get a foot in the door and eventually
find a seat behind the trading desk.
"The best advice I can offer is to take advantage of any co-op student
opportunities at an electrical utility that has a trading group," says Tomson.
"This will give you an introduction to the industry and to the company.
If this is not available, make connections to job shadow or personally interview
an individual in electricity or gas trading or the support departments to
the trading group."
"If you can find an internship while you're in school... at a bank or at
a hedge fund or a utilities trader, [that] is the easiest way to get into
it," says Allen.
Anyone thinking about becoming a power trader should consider taking courses
in finance or economics, and courses on how markets work.
"You see a lot of engineering students go into trading, and the reason
being is not just the mathematics but the logic that's taught in engineering,"
says Hallermann. "The rigor of the mathematics creates a level of logic that
makes trading a natural segue for math students to go into."
Much of what an energy trader needs to know is learned on the job. That's
why getting exposure to the industry is so important.
"When I'm looking to hire a trader, I'm looking for someone who's had experience
working at a utility, and also has experience working at a bank or a hedge
fund," says Allen. "I think that's the perfect blend of experience for a good,
well-rounded trader."