"This job appealed to me," says energy trader Lucia Tomson. "It combined
the technical expertise of electricity generation and delivery with negotiation
of deals and the requirements to keep up to date on the regulations, weather
and systems affecting other counterparties."
Being an energy trader is interesting and challenging work, adds Tomson.
There's a lot riding on the decisions you make.
"The major challenge for this work is backing up your deals -- your view
on price and the rationale," says Tomson.
"The other major challenge is dealing with the fact that you will have
winning and losing trades, and the goal is to have much more wins than losses,
so that you net monetary gains. The challenge here is to ensure that your
wins are based on solid fundamental information and to investigate what could
be missing in your research or faults in your assumptions that led to the
losses."
Losses and uncertainty simply go with the territory as an energy trader.
What are some personal qualities that help energy traders deal with these
challenges?
"Personal qualities would include having an analytical mind, [being able
to] act fast on deals, and the confidence to stand up for your viewpoint,"
says Tomson.
"Additionally, one must be open to criticisms/critiques that are valid
in order to adjust your research/viewpoint. This criticism is part of the
daily life of a trader."
Detlef Hallermann agrees that energy traders need to be able to handle
criticism. He's the director of the energy trading program at Texas A&M
University.
"It requires that they have a pretty thick skin, because there are times
when [a junior trader] may say, 'Hey, I don't get this, it doesn't look right,'
and they find out it's not because something was wrong, it's because they
didn't really understand what's happening," says Hallermann.
"And they're going to get some chiding on that, or they're going to get
a little bit of teasing.
"This is where it's important to be intellectually quick and be able to
understand that some days you have bad days, some days you have good days,
and you just keep fighting and learning," says Hallermann.
"And as long as you're trying to learn, people are going to respect you
for really trying to do the best job that you can do."
That kind of persistence and hard work has served Wesley Allen well. He's
the CEO of an energy trading firm in Raleigh, North Carolina.
"You have to be hard working," says Allen. "It doesn't matter if you're
a commodities trader or [you're] in any other profession. That's the one thing
I've found separates people who are successful versus those who aren't. It's
the great equalizer.
"When I was in school, I was never one of the brightest kids, and there
was never anything I could have done about that," says Allen.
"You're just kind of who you are. But the one thing I could control was
how hard I worked. And I made it my goal to be the hardest working person
there is, both in school and later in my career."
Allen studied business and finance at North Carolina State University.
He started in the power industry as an intern for Carolina Power and Light
(CP&L). This involved evaluating weather and power plant data. He was
soon hired as a trader at CP&L.
Allen's firm trades electricity in much of the U.S. and in the Canadian
province of Manitoba.
"Most people think of energy traders, any sort of trader, as very big risk
takers and kind of reckless, and there is some of that in the industry," says
Allen.
"But the successful trader, long term, isn't the person who's
chasing the outside of a particular trade. It's a person who's worried about
the risk -- what's my downside? And so the most successful traders actually
tend to be more risk-averse type people, I think."
Being able to assess and manage risk is a big part of the job. But above
all, when Allen hires energy traders, he looks for the kind of work ethic
that has contributed to his own success.
"If I could choose between the kid with the 3.0 (grade point average) or
the kid with the 4.0, and I know the kid with the 3.0 is going to work his
tail off, that's what I want."