Intern in top-tier trading
Hi
WSO
,
I've been following on the sideline for a couple of years and finally made by first profile.
I completed a bachelors in
economics in summer
2022, and will continue my masters in economics in 2023, both from non-target schools, as we don't have those in Denmark. My GPA is 4.0/4.0. In the meantime i'm working fulltime in top-tier energytrading business in Denmark, where i work as a Junior risk analyst, and will soon transition to dispatching in front-office. Before all this, i've been 10 years in construction and a couple of years in the army. (I'm 30 years old).
I would really like to start my internship-journey in a well-known firm as GS , Morgan stanley , DE shaw etc. But I feel like they're way out of my league. Do you guys have any recommendations to get into these kind of companies, with my kind of CV? Or should i target lower-tier trading companies? A possibility is also interning at my own company, but I don't feel it will make my CV stronger.
Comments ( 25 )
Based on your comment I guess you're at Danske or Neas/Centrica. I can only talk from my own experience. I am a power & gas trader and was an occasional counterparty to your traders when I was on intraday/dispatch. If your goal is to be a power/gas/commodities trader I'm not sure why you would want to move to a financial institution/ hedge fund at to learn the craft. They have their benefits but at an early stage yo are better off at Dankse or moving to one of the other big European names. Go to RWE/EDF/BP/Shell/Statkraft/Trafi/Vitol etc and learn the nuts and bolts of it and then if you want move to the hedge fund or bank to trade, you would be much more valuable to them at that point anyway. Thats just my 2 cents as someone who has faced the decision in the past.
If you want to be a good trader and getting the top jobs its not about furnishing your CV but developing a rep for knowing your business inside out which for most commodities happens in the physical world.
If you don't care about staying in commodities you can throw everything I said out the window as I'm sure you'll learn at lot more about interest rate swaps and junk bonds at GS than at a euro energy utility.
Thanks for your insightful comment. You're absolutely right about the company, and your thoughts about staying in my company if I want to be in commodities trading sector is also thoughts I've been considering by self. My main reason for maybe going other ways is primarily compensation. Firstly in Denmark it's hard to get a "high-compensation", at least if you compare to London/ NYC standards, although I acknowledge living costs are also lover and the welfare system is vastly different. Second It's my impression that the overall compensation in energy-trading is lower than for example prop-trading in lets say GS .
But do you believe it could be possible to take 4-5 years as a trader in commodities and then transition to for example a hedge fund, because you already know the craft in some kind and then hopefully cash in a way higher compensation?
You're right and wrong - your situation in Denmark is unique partly just because you are taxed so much. Yes the earning potential is lower on intraday/dispatch is lower than the curve but energy traders as a whole are on the higher end of POTENTIAL pay. But I have no doubt there are some of your colleagues in Equinor and possibly Danske who are getting very big payouts. Otherwise they would have left. If you do well then mid 6 figure bonuses are common and 7 figure bonuses are not all the irregular in the good years as long as you make money. Especially if you are in a merchant utility or independent house like Vitol/trafi.
Also there is no such thing as prop trading at GS or most banks anymore. Dodd-Frank did away with it although they can still get away with a lot under the umbrella of market-making. as seen by the 3 billion commodity profits las year at GS . You will get a high base but for the last decade European and European divisions of banks have had bonus caps. Stop buying into the now defunct image of the superstar wall st trader getting 8 figure payouts, they are few and far between.
If you are good enough yes you can jump to a fund in a few years but my own opinion is the funds will have a much harder time in the coming years. You seem to forget that the payouts only happen when you make a lot of money trading which is a lot harder than it looks from the outside. You dont just jump to a hedge-fund and get paid a million euros. You get a pretty low base and then the opportunity to take home 10-15% of what you make after costs, if you really know your stuff yes you can make a killing but if you just know the craft in some kind you will get dropped very fast.
Stop worrying about where you can get paid the most , worry about where you will become the best trader and the money will follow.
You have some good pointers here. There is not doubt that some in the energy sector is making big payouts, but I didn't imagine it being in that range unless you are VP or C-suite . If that's possible I would stay in danske and work hard to transition to a power / intraday-prop trader before ending my master's. If I understand you correctly, that would be a great way to get into the trader position and learn the craft, and then it should be easier to break in to international careers in top companies as trafi/glencore.
Thanks for your answers. I have a little side-question if that's okay. Where would you place danske in terms of energy-trading tier? I feel after the equinor deal, that they are pretty far up there, but still nok in the same league as eg. trafi.
Trader payouts are a function of how much money you make , how much the company makes and any caps/rules the company has. It's not unusual for traders to make more than their managers or VP's etc.
I think you're too focused on prestige here but nonetheless Danske has a good rep - in power trading- because that's what the company is at it's core. You made 1 billion in pnl last year , it takes a certain amount of expertise to get to that level. I would have no issue working there if I didn't have to live in Aarhus lol.
The other danish guys especially the smaller prop shops( although most are now owned by bigger companies) are talented but mainly focused on intraday and short-term. They are restricted in that sense for now because they don't have the balance sheets to get involved in the bigger stuff. Danske itself needed a cash injection from equinor to keep moving last year even though it was making money.
The Euro boys don't like to payout massive bonuses, goes against their socialistic mindset. Mid 6, and on a year like last high 6 sure, but always a % of base and not % book. The insane benefits, work-life-balance, and essentially zero risk of losing your job are why people stick around. Great spot to coast to retirement.
This is just a blatantly wrong answer from someone who obviously hasn't worked for a euro firm- The banks have been capped to a % of base due to some notable events circa 2008 . The vast majority of other shops are % of book . The merchant utilities and and some nordic firms included. Trafi and Vitol have bigger payouts than US banks and no issue firing under-performers. They still have to compete somewhat with the euro arms of hedge funds like Citadel and Millenium. I am on a % of book and have been at UK and German based companies.
No need to be sour because us 'Euro boys with socialistic mindsets' can get 5 weeks vacation, parental leave, free healthcare AND a 7 figure payout. Send me a message and I'm sure we can find a spot for you over here too. :P
You were talking about Equinor/Danske not Vitol/Trafi/Citadel. I can assure you no trader is getting % of book or making 7 figure bonuses at a state owned euro oil/gas company no matter how many billions they make after a 78% tax rate. Bonuses are % of base and cap out. Trade houses and hedge funds completely different but I'm sure you know that.
Re-read it ' If you do well then mid 6 figure bonuses are common and 7 figure bonuses are not all the irregular in the good years as long as you make money. Especially if you are in a merchant utility or independent house like Vitol/trafi' .
Regrdless your knowledge is out of date for state-owned as well . I know two state-owned cos that pay book %. I have worked at one of them and can assure you right back there was no cap and was book % . I'm not this confident in my answer for no reason.
They just move higher paid employees to london or germany so it's not as transparent or subject public review like in the Nordics and some other countries with income tax transparency
Interesting discussion you two have. Obviously I can't say who is right or wrong. I hope it's John, but it's my impression that the compensation is more like what anon says, unfortunately. At least in some of the Danish companies.
Guess I'll try dig deeper and poke some of my colleagues to figure this out.
My reading comprehension is just fine… But I have no doubt there are some of your colleagues in Equinor and possibly Danske who are getting very big payouts. Otherwise they would have left.
I can assure you this is not the case. I know several individuals who made > $100M/yr trading their own spec books within the firms you pretend to know about who are getting < 7 figures in bonus this year and also last year. If you're talking about other firms then by all means you may be correct.
The OP appears to be working for Danske/Equinor and if you're looking to be paid out massive bonuses or any sort of % of book you need to look elsewhere. As they pay a % of salary which caps out, go ask any recruiter you want. There are of course plenty of other reasons extrinsic of comp to stick around, which is why many do. Everything is a trade off.
I won't argue about Equinor - if you say you know it well then so be it. Maybe they are capped and I would agree op needs to go elsewhere as for a payout.
As for the other firms I listed who would fall under my 'vast majority' scope , I'll take my 'pretend' knowledge gained from my contract, being paid/recruited by them and from colleaugues over second hand knowledge from across the atlantic
In the end @ KK.-_-. do your research, find a good trading seat - by the time you're skilled enough and running enough risk to get capped out, if you are capped, you will have opportunities to move to somewhere with higher potential. Happy to have a more detailed less vague conversation in PM, give you some links and names to talk to.
Glad we're in agreement. Yes when it comes to OPs exact situation you weren't giving the most accurate of info. Just trying to provide OP with the most transparent picture he can get, specifically to his apparent situation as he seems to not know (hence why he's asking). My use of the word "euro" was a bit too broad I will apologize as it was in regards to Equinor(Danske) and your "payout" comment, wasn't looking to antagonize/talk shit.
Equinor(Danske) is a fine company to work for, but compensation wise they tend to err on the lower side of their peers especially when it comes to discretionary bonuses. That's offset by other benefits namely job security/work-life-balance/pension etc. You will not see massive payouts as it's just not part of the culture even after a year like the last. Goes both ways when it comes to a year like 2020 though. Lower highs, higher lows. Just depends what you're after/where you are in your career. Cheers.
How do you take 5 weeks off when you have a book to run?
Bump! I've been approached by two Danish prop shops, but I'm also curious about their reputation internationally.
If it is one of the firms mentioned in here, that is the top-tier already. If we are speaking about higher comp that is a different story and one 3 years away for you.
Main issue is the bonus caps they have..
Will you enlighten us with that story?
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