What is a Trading Desk?

The definition of a natural gas trading desk depends on the function that desk is looking to serve. In the physical market, trading desks can be involved in buying and selling natural gas, and nominating and balacing natural gas in the natural gas pipeline grid, either in a speculative fashion to take advantage of current or expected price differentials, or in the ordinary course of business as a way to maximze revenue and/or minimize the costs of getting physical supply to market or to an end-use facility. Financial trading desks tend to be more speculative in nature, although they can also be used to help mitigate financial risk. Such financial based natural gas traders focus on securities such as natural gas futures and opitons contracts, exchange traded and over-the-counter basis differential swaps, and even energy equities and fixed income instruments.