Energy Trading Competition. Off to New Orleans!

At the start of this month, I chose to participate in the annual Tulane University Energy Trading Competition. My team member and I entered the preliminary rounds and traded light sweet crude oil and natural gas contracts intra-day for two weeks. We were new to the energy markets, but research and due diligence ultimately prevailed.

Our largest gain followed a storage report a few days before the ending of round one of trading. I looked at previous crude oil storage data, demand, pipeline conditions, and technicals to make a prediction. There was high storage the past week, coupled with increasing demand heading into the winter season, and a pipeline leak in Canada was slowly being repaired - easing the flow of supply throughout North America. All of these fundamentals helped me formulate a trading strategy; one that is not complete or executed unless real data supports my forecast. The volatility was too high to enter the position based on a forecast, and for the sake of risk, I decided to wait until the official announcement. Turns out, storage came out low, and I immediately took on a long position, expecting crude oil prices to rise as low supply - high demand became the forces behind market movements.

My teammate and I made a combined profit of $29,000 with starting capital of $100,000 (roughly 20% gain in two weeks of trading). This took a lot of hard work and time dedication, and the learning experience was definitely worth while. We did take on some risk with the storage report trade, which placed us in 14th place based on a risk adjusted index. However, based on unadjusted profits, we hold the number one spot out of about 84 participants from colleges and universities around the country. Now, I will travel to New Orleans to compete in the final round in hopes of winning.

I will act as a hedger for simulated energy companies based on a given case. More information will be provided in the follow-up post.

This is an amazing opportunity, and it's one factor that lays out the path for Dantes Outlook. My passion for Economics, financial markets, and trading will surely become the business model behind this network. Our Facebook and Twitter groups of intelligent people from across the world, readers who comment and message me with ideas, and others who support the growth of my outlook keep me going. I learned to never back down, and to keep on pursuing the best. Your interest helps this mission, and together, the network on Dantes Outlook becomes stronger. Stick with me.