Survey: Energy Traders Using More Information
The primary factor contributing to energy trading room success
is information, which comes before risk management and workplace
cultural factors, according to a Saladin survey of energy traders.
Traders told Saladin they are using more information and
analysis than they did a year ago. Saladin predicted a year ago
that Internet usage would outpace traders' predictions, which the
information provider found to be the case with its latest survey.
Also as predicted, there is an increased focus on risk management
and integrated systems. Three-quarters of traders reported
increased use of the Internet. More than 20% of trading rooms
implemented new risk management systems over the last year, and
nearly a third of those surveyed noted advances in sophistication;
in implementation of value at risk; and in systems, controls and
According to survey results, the greatest impact on energy
markets overall comes from an increase in cross-commodity trading.
Traders predicted further growth and opportunities over the next
two years, as well as continued development of mixed and
derivatives trading. Also predicted are increased competition,
market instability, and restructuring.
Deregulation of energy markets, particularly in gas and
electricity, is having an impact on trading - but this has so far
been less dramatic and more gradual than is often stated. Around
half of the Saladin survey group has little visibility or
understanding of the differences between the various sectors, but
about 45% see some effect on their own recruitment and resources,
and around 30% note changes in their approach to trading, the
commodities being traded and trading room performance.
Of 37 companies cited by survey respondents, Enron, Vitol, and
Morgan Stanley had the top three trading rooms, followed by J Aron
and BP and Koch, which tied for fifth place.
The Saladin Report is available from Saladin and on the Saladin
Web site at www.saladin.com.
Joe Fisher, Houston
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