Volumes of electricity and futures options have hit record levels and energy trading desks are fizzing.
d-cyphaTrade, the energy market’s official product sponsor and development company, says the number of financial energy trading desks has doubled since June 2007, with the banks and options trading houses among the biggest movers and shakers.
Dean Price, general manager of d-cypha, explains, “The Australian energy trading industry has recently boomed because of the lure of emerging markets returns, which have encouraged more trading desks to set up here to trade Australian electricity.”
Connell Burke, a trader from Westpac Global Energy, says market fundamentals have boosted hiring: “The drought drove up the costs of generating electricity. With the number of speculators in the market multiplying, it’s fair to say the demand for good energy traders isn’t going backwards.”
Strong demand is also creating high voltage salaries: Burke says a senior power trader in Sydney can earn between AU$150k and AU$300k, plus bonus, annually.
Sydney-based recruiter Richard Stubley, a partner with Hamilton Partners, says the figure is more likely to be around AU$150k plus bonus, however a head of a trading can earn closer to an AU$300k base.
He adds that earnings can vary widely according to experience and P&L: “A couple of young traders that work with one of the arbitrage companies with just two years’ experience pulled AU$500k last year.”