Meet an analyst at BNP Paribas

Lucy Mair asks an analyst in commodity derivative sales what their job is all about

Carly Simpson is an analyst in commodities derivatives sales.

Tell us about your role...

I work in the gas and power origination team within commodities derivatives sales. We act as the middlemen between our clients, who are mostly major utilities companies in central Europe, and commodities traders. Our clients issue trade requests to us, the sales team, when they want to buy or sell either physical commodities - gas, power, oil, coal and emissions - or commodities-based derivatives - tradeable financial contracts relating to an underlying actual commodity.

I liaise with the traders on behalf of our clients and find them the best possible price for the product they wish to buy or sell. On an average day, four or five different clients might want to trade two or three times each, so I'm constantly on the trading floor, taking these requests from clients and negotiating with traders. I don't have my own clients yet, but help my colleagues represent theirs.

How is a trade executed?

A client approaches us with a trade request, saying which product they wish to buy or sell, at what volume and for what time period. For instance, a client might want to trade a gas swap, meaning they want to buy from us or sell to us the right to receive a particular amount of gas over a particular period. I make a spreadsheet outlining the desired time period (say, January to December 2013) and the volume (for example, 230,000 megawatt hours of gas per month) and use it to calculate the price I think the sale should be made at. I then send the original trade request to a trader, who gives me a price they think is appropriate. After adding margin - the commission we make for the bank on each trade - I relay our quote to the client. There's usually some negotiation before we find a price that both parties are happy to trade at.

How has your role developed and what are your hopes for the future?

I've been here for a year and have spent a large part of it being taught how to use all the spreadsheets, how to price, and how to use the internal systems. I executed my first trade after two months, which was quite nerve-racking, but I execute big trades most days now.

I've also been able to sit in on a couple of client meetings as an observer. Doing so has allowed me to see how my role will hopefully evolve to the point at which I'm managing my own clients. I've been able to attend some social events with clients too - I recently went to a day at the races with a client I speak to every day on the phone. It was great to meet them in person.

My long term objective is to get confident at trade execution and to understand more about the gas and power industries so that I can manage my own portfolio of clients successfully.

What do you enjoy most about your job?

I enjoy the buzz of executing a trade and the environment I work in. On the trading floor there's never a dull moment. You get used to doing five things at once very quickly: it's an exhilarating place to work. I quickly learnt that it's no place for shrinking violets - you shouldn't be afraid to ask questions because if you mishear a figure or misunderstand a trade request, it could be costly.

Diary

7am

On the road

Leave my flat, run to work, shower and grab some breakfast from the canteen to eat at my desk.

8am

Get up to speed with the news

It's very important to keep up to date as economic news can have a large effect on oil prices, which in turn affects the price of most other commodities. I pass this information on to clients when liaising with them throughout the day.

10am

Quote me on this

A client calls with a trade request for a gas swap deal, including the type of the gas they would like to trade, the volume and the time period. I pass on the details to the trader and they give me their price. I then simulate the trade on our internal program to calculate the internal credit costs and the amount of commission I need to add, and then contact the client with the final figure.

11am

Meet a target

Some of our clients send us a target for a specific type of trade they'd like to do. I monitor the markets with these in mind, and when a price hits a particular client's target, I contact them and then the trader to execute the trade.

12.30pm

Lunch

I have a little time, so I take 15 minutes to grab some lunch downstairs with a friend in the bank's graduate intake.

1.30pm

Trading on power

Our client, an electricity company, wants to use a derivative product to fix the price at which they buy their inputs (carbon emission certificates and gas), and the price they that sell their output (power). The details of the trade are confirmed with the client on a recorded telephone line which can be referred to if any discrepancies arise in the future.

3pm

Gaseous exchange

A client calls wanting to trade gas with us using a kind of trading technique we haven't used before. I do the necessary setting-up in Excel and in our internal systems.

5pm

The home stretch

I check that the team's trades from yesterday have all been entered into our systems correctly. Most days I finish at 6pm but a large part of being a salesperson is entertaining clients and today I go to meet some at an event hosted by BNP Paribas.

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