Energy Trader - Career Insights
Energy traders act as brokers of energy commodities such as oil or natural gas. A bachelor's degree is typically required of an energy trader though few companies don't mind the degree for as long as the energy trader has extensive trading experience. Most energy traders start their careers in equity trading or engineering, and the average annual compensation of an energy trader in the US is $107,758. More details regarding the energy trader's scope, responsibilities, qualifications, compensation, career path, and remote opportunities are outlined below.
Similar Job Titles
- The energy trader's similar job titles include power trader, petrochemical trader, oil trader, natural gas trader, commodity trader, and power and fuel trading director.
Scope and Responsibilities
- An energy trader is tasked with monitoring energy levels, reporting excesses or needs, and conducting "market analysis to identify fluctuations in cost and availability of power sources." The energy trader also trades futures "which are a contract to purchase some asset at a future time."
- Energy traders are like stockbrokers in that the responsibilities "include tracking commodity prices, predicting market trends and changes, and making informed decisions on what purchases or sales will make the most profit." Energy traders act as brokers between sellers and buyers of energy commodities such as oil, natural gas, or liquid gas.
- The energy trader of Eagle Seven, LLC has these responsibilities: operate "grey and black box algorithmic trading strategies in accordance with the trading desk’s objectives," monitor "trading activity and positions consistently throughout the shift," perform "research and post-trade analysis using the firm’s research tools on a variety of algorithmic trading strategies to improve the profitability of existing models," "work with back office to solve for trade breaks, position and activity reconciliation exceptions," communicate "with exchanges, risk managers and internal technology groups regarding production issues," and " work closely with strategy developers in order to communicate and propose certain strategy-specific code changes related to execution, pricing, and risk management."
- The energy trader needs to have knowledge of trading practices and energy trading markets. Up-to-date knowledge of news or research in the field is also crucial. Strong analytical skill is also necessary.
- A bachelor's degree related to finance or any other similar field is typically required as most companies are looking for an energy trader with a degree. A master's degree is even more preferable.
- However, a few companies don't require a degree but require extensive experience instead. One of these companies is Petroplan in Dubai. Petroplan is hiring a petrochemical trader that may only have a high school education but has 10 or more years of experience in international physical trading, has experience in dealing with suppliers and customers, has experience with niche petrochemical products, has multi-regional and multicultural experience, has strong business acumen, and can travel frequently.
- Eagle Seven, LLC has these qualifications for its energy traders: has a bachelor’s degree in finance or business, mathematics, engineering, statistics, or any related field, has at least four years of work experience in trading financial products such as futures or options assets, has experience with Python (programming language), has strong quantitative, analytical, and math skills, able to work independently, able to "successfully manage multiple tasks in a complex and fast-paced environment," has strong attention to detail, has good organizational skills, has excellent verbal and written communication skills, has a strong work ethic, and is a team player who's "focused on contributing to the success of the trading desk."
Typical Career Path
- Most energy traders had prior jobs in trading financial assets since most companies require their energy traders' trading experience. Thus, most energy traders started their careers in equity trading.
- A common path also includes starting as a portfolio manager or investment banking analyst before transitioning to energy trading.
- Most energy traders also started with engineering work before becoming energy traders. Engineering knowledge is beneficial in energy trading analysis and decisions.
- Energy traders in the US have an average compensation of $51.81 per hour or $107,758 per year. The top 10% of energy traders are making $184,000 annually, while the bottom 10% make $62,000 annually.
- The average salary of an energy trader is different depending on the company. Companies that offer the highest compensation for energy traders are Shell Energy North America, Xcel Energy, American Electric Power, Sempra Energy, Puget Sound International, Public Service and Electric Gas Company (PSEG), NRG Energy, ABN AMRO Chicago Corporation, Rainbow Shops, and Dynasty Energy Group.
- The average annual compensation in Shell Energy is $164,629 then $143,841 in Xcel Energy, $143,837 in American Electric, $143,832 in Sempra Energy, $130,095 in Puget Sound International, $144,000 in PSEG, $125,500 in NRG Energy, $120,000 in ABN, $119,000 in Rainbow Shops, and $115,336 in Dynasty Energy Group.
Best States to be an Energy Trader
- The best-paying states and cities in the United States are Rhode Island, Massachusetts, Connecticut, and New Jersey. On the other hand, the lowest-paying states are Illinois ($68,000), Georgia ($74,000), Tennessee ($75,000), and North Dakota ($76,000).
- The average salary of an energy trader in Rhode Island is $113,000. The average salaries in Massachusetts, Connecticut, and New Jersey are the same, $112,000.
- Though Rhode Island is the best-paying state, Newark City in New Jersey is the best-paying city. The average salary of an energy trader in Newark, New Jersey is $115,000.
- These are some of the average salaries in other cities: $111,000 in New York City, $91,000 in Houston, Texas, $83,000 in Overland Park, Kansas, and $69,000 in Chicago, Illinois.
- The T3 Trading Group in the United States is recruiting entrepreneurial traders for remote positions. The trading group also helps traders to develop their potentials by providing in-depth training and education in market psychology, technical analysis, and other related fields. Futures trading, which is what an energy trader does, is included in the types of traders that T3 hires.
- FTR Power Trader in Boston, Massachusetts also offers remote work as it partnered with an established energy trading firm that offers flexibility. However, the company is looking for an experienced energy trader.
- One may also connect with Tom Moffett or David Green. Moffett is an energy trader working at Shell Energy North America based in San Diego, and his LinkedIn profile is here. On the other hand, David Green is Xcel Energy's head of energy trading who is based in Denver, and his LinkedIn profile is here.