Energy trader

Energy traders sell or buy shares of energy, sometimes from different sources. They analyse the energy market and investigate price trends to decide when to buy or sell shares and ensure the most profit. They make calculations write reports on energy trade procedures, and make predictions on the development of the market.

The following job titles also refer to energy trader:

energy stock trader
energy market researcher
energy stock analyst
renewable energy stock trader
energy market analyst
commodity trader, energy
renewable energy stock analyst
energy trading analyst
energy market economist
renewable energy share trader
energy share trader
energy market forecaster

Knowledge of both financial trading and energy production is helpful for energy trading, and several college majors can help build that base knowledge. A bachelor’s degree in business or finance can teach the foundations of trading, like risk management and how to understand the market.

Some companies seek energy traders with non-financial backgrounds, like geology or engineering. A major in petroleum engineering can help get a job with an energy company directly after undergraduate studies.

The energy trader job market is competitive, so considering a Master of Business Administration (MBA) is certainly worth it to stand out. Many schools offer specializations like market finance, trade and logistics, commodities and capital markets, which can directly relate to energy trading.

ISCO skill level is defined as a function of the complexity and range of tasks and duties to be performed in an occupation. It is measured on a scale from 1 to 4, with 1 the lowest level and 4 the highest, by considering:

• the nature of the work performed in an occupation in relation to the characteristic tasks and duties
• the level of formal education required for competent performance of the tasks and duties involved and
• the amount of informal on-the-job training and/or previous experience in a related occupation required for competent performance of these tasks and duties.

Energy trader is a Skill level 3 occupation.

These occupations, although different, require a lot of knowledge and skills similar to energy trader.

financial broker
financial trader
mutual fund broker
securities broker
stock trader

These occupations require some skills and knowledge of energy trader. They also require other skills and knowledge, but at a higher ISCO skill level, meaning these occupations are accessible from a position of energy trader with a significant experience and/or extensive training.

dividend analyst
securities analyst
investment analyst
mergers and acquisitions analyst
personal trust officer

This knowledge should be acquired through learning to fulfill the role of energy trader.

• Energy market: The trends and major driving factors in the energy trading market, energy trades methodologies and practice, and the identification of the major stakeholders in the energy sector.
• Financial products: The different types of instruments that apply to the management of cash flow that are available on the market, such as shares, bonds, options or funds.
• Economics: Economic principles and practices, financial and commodity markets, banking and the analysis of financial data.
• Market analysis: The field of market analysis and research and its particular research methods.
• Stock market: The market in which shares of publicly held companies are issued and traded.
• Investment analysis: The methods and tools for analysis of an investment compared to its potential return. Identification and calculation of profitability ratio and financial indicators in relation to associated risks to guide decision on investment.

These skills are necessary for the role of energy trader.

• Forecast energy prices: Analyse the energy market and external factors which may influence trends in the energy market in order to predict the movement of prices for energy and utility consumption.
• Analyse energy market trends: Analyse data influencing the movement of the energy market, and liaise with the important stakeholders in the energy field in order to make accurate predictions and perform the most beneficial actions.
• Create a financial plan: Develop a financial plan according to financial and client regulations, including an investor profile, financial advice, and negotiation and transaction plans.
• Obtain financial information: Gather information on securities, market conditions, governmental regulations and the financial situation, goals and needs of clients or companies.
• Manage financial risk: Predict and manage financial risks, and identify procedures to avoid or minimise their impact.
• Operate financial instruments: Work with financial instruments such as stocks, bonds, mutual funds and derivatives.
• Monitor stock market: Observe and analyse the stock market and its trends on a daily basis to gather up-to-date information in order to develop investment strategies.
• Trade securities: Buy or sell tradable financial products such as equity and debt securities on your own account or on behalf of a private customer, corporate customer or credit institution.
• Handle financial transactions: Administer currencies, financial exchange activities, deposits as well as company and voucher payments. Prepare and manage guest accounts and take payments by cash, credit card and debit card.
• Maintain financial records: Keep track of and finalise all formal documents representing the financial transactions of a business or project.

This knowledge is sometimes, but not always, required for the role of energy trader. However, mastering this knowledge allows you to have more opportunities for career development.

• Gas market: The trends and major driving factors in the gas trading market, gas trades methodologies and practice, and the identification of the major stakeholders in the gas sector.
• Electricity market: The trends and major driving factors in the electricity trading market, electricity trades methodologies and practice, and the identification of the major stakeholders in the electricity sector.
• Mathematics: Mathematics is the study of topics such as quantity, structure, space, and change. It involves the identification of patterns and formulating new conjectures based on them. Mathematicians strive to prove the truth or falsity of these conjectures. There are many fields of mathematics, some of which are widely used for practical applications.
• Modern portfolio theory: The theory of finance that attempts to either maximise the profit of an investment equivalent to the risk taken or to reduce the risk for the expected profit of an investment by judiciously choosing the right combination of financial products.
• Financial jurisdiction: Financial rules and procedures applicable to a certain location, whose regulatory bodies decide on its jurisdiction

These skills and competences are sometimes, but not always, required for the role of energy trader. However, mastering these skills and competences allows you to have more opportunities for career development.

• Communicate with customers: Respond to and communicate with customers in the most efficient and appropriate manner to enable them to access the desired products or services, or any other help they may require.
• Execute analytical mathematical calculations: Apply mathematical methods and make use of calculation technologies in order to perform analyses and devise solutions to specific problems.
• Provide cost benefit analysis reports: Prepare, compile and communicate reports with broken down cost analysis on the proposal and budget plans of the company. Analyse the financial or social costs and benefits of a project or investment in advance over a given period of time.
• Review investment portfolios: Meet with clients to review or update an investment portfolio and provide financial advice on investments.
• Review meteorological forecast data: Revise estimated meteorological parameters; solve gaps between real-time conditions and estimated conditions.
• Analyse economic trends: Analyse developments in national or international trade, business relations, banking, and developments in public finance and how these factors interact with one another in a given economic context.
• Provide support in financial calculation: Provide colleagues, clients or other parties with financial support for complex files or calculations.
• Handle financial disputes: Handle disputes between individuals or organisations, either public or corporate, which deal with financial matters, accounts, and taxation.

3311 – Securities and finance dealers and brokers

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References

1. Energy trader – ESCO
2. 4 Steps To Become an Energy Trader | Indeed.com
3. Featured image: By Own Oil Industry News – Own Own work, Public Domain