October 28, 2013

Trading on the Beach

Two semesters down and one to go. The Boston University MS in Mathematical Finance program has been a challenging yet rewarding endeavor for my academic and professional career. I was fortunate to receive an amazing summer internship offer at NextEra Energy as an Options Desk Analyst located in tropical Juno Beach, Florida. Through the invaluable help of our Executive Director, Ahmad Namini, and Corporate Relations Director, Cristine Nigro, 98% of first year MSMF students secured summer internships with high-quality firms across the country and abroad.

Aside from the white sandy beaches, sky blue ocean and perfectly groomed golf courses of Southeast Florida, life on a trading floor was quite the opposite of the relaxing scenery. NextEra Energy is a leading producer and marketeer of renewable and clean electricity. With the worlds largest wind power generation fleet along with natural gas and nuclear generation, they operate 43,000 MWs of electricity across the country. That is enough electricity to power around 40 million homes! The job of the trading floor at NextEra is to optimize the margins of their assets as well as take advantage of our leverage in the electricity and natural gas markets.

Arriving on the first day, the trading floor was exactly as I imagined it with rows of desks, traders with headsets talking with exchanges and clients, along with up to ten computer screens at each station stacked on one another. It was certainly an intimidating experience especially not knowing much about the electricity market.

However, within days, I was knee deep within different projects and analytics on the Options Desk. By applying many of the learned concepts from the MSMF program, I was able to derive implied volatility skews, deltas of our bullet options and price unit-contingent deals for counterparties across the country. Beyond that, I also spent the majority of my time working on a proprietary trading model for electricity futures at the Mid-Columbia power hub. This model backtested extremely well and the company is looking to implement it in their trading book this Fall.

Near the end of my internship, I felt accomplished with the value that I was able to bring to the company over the three months. As a part of the program, all of the interns presented their summer work to the CEO and CFO of the company. Shortly after my presentation, I was offered a full time position at the company as a trading analyst on the trading floor. I have accepted the offer and am very excited about starting my career with NextEra Energy in January.

When I arrived back at Boston University in late August, I have heard many great internship success stories from my colleagues. The program at BU has equipped us with the tools it takes to be successful in the industry. With the technical skills and the soft skills, we become an invaluable asset to financial firms who are striving for students to be able to both produce and explain the complicated quantitative work we do. This semester will be exciting as my classmates interview and select which company they will be taking their talents to. I am confident graduates of the Boston University MS in Mathematical Finance program will continue to be leaders in the quantitative finance industry for years to come.

Justin Tyo is a second year Math Finance student who spent his summer at NextEra Energy in Juno Beach, Florida. Academically, Justin is interested in taking advantage of misprices across the term structure of energy futures. Outside of the classroom, he enjoys cooking Italian food, University of Michigan football/basketball games, trading options and playing golf.

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