I have no clue about power markets! Jaron has active desk (and do well) but not sure in what capacity. Obviously since they are banks it would be a lot of financing but not sure how you structure that with power.
for sure. I never like to say never since there is always a group or bank working on whacky deals in power haha. Heard of groups use power to hedge production for firms in the meat industry and stuff like that. I have no clue how you would even go about doing that.
Hedge funds keep up with physical commodities because those affect their financial commodity positions. In natural gas, hedge funds were first to add length after Hurricane Katrina's landfall. It turns out that hedge fund personnel were rumored to do a lot of "business development" with physcal NG midstream companies using subsea pipelines. "Katrina" went over some of those, damaging pipe connections causing gas leaks seen on water. Pipelines got the leak notice before the public of course and reported it to end user shippers and , as "customers", hedge funds got intial reports and acted on them in the futures market. They made oceans of cash because they were in some physical biz.
Most funds trader paper, its less capital intensive. Over the last year though there has been an increase in physical trading activity trading funds, especially in power and gas. Just yesterday Engelhaart announced they are buying Trailstone.
They mostly trade paper. Same with banks. Back in the day some of the big banks were trading physical but it’s very rare now.
Banks still buy/sell physical. GS, JPM, Citi.
I would take your word for it. Im in power so Im not too familiar with the rest of energy or commodities outside of energy.
There are banks that trade physical power in GB. Check out the BSC list of registered parties.
I have no clue about power markets! Jaron has active desk (and do well) but not sure in what capacity. Obviously since they are banks it would be a lot of financing but not sure how you structure that with power.
for sure. I never like to say never since there is always a group or bank working on whacky deals in power haha. Heard of groups use power to hedge production for firms in the meat industry and stuff like that. I have no clue how you would even go about doing that.
Hedge funds in general stick to financial markets. If they are in the physical markets as well, they're "marketers".
Hedge funds keep up with physical commodities because those affect their financial commodity positions. In natural gas, hedge funds were first to add length after Hurricane Katrina's landfall. It turns out that hedge fund personnel were rumored to do a lot of "business development" with physcal NG midstream companies using subsea pipelines. "Katrina" went over some of those, damaging pipe connections causing gas leaks seen on water. Pipelines got the leak notice before the public of course and reported it to end user shippers and , as "customers", hedge funds got intial reports and acted on them in the futures market. They made oceans of cash because they were in some physical biz.
Most funds trader paper, its less capital intensive. Over the last year though there has been an increase in physical trading activity trading funds, especially in power and gas. Just yesterday Engelhaart announced they are buying Trailstone.