Risk Manager

Active Power Investments LLC (“API”) is a financial market participant in North American wholesale electric power and natural gas markets, generally acting as a liquidity provider. Our team participates in the trading of virtual transactions, financial transmission rights, and related exchange-traded derivatives (“ETD”). We are seeking a Risk Manager with multi-year experience in the management, measurement, evaluation, analysis, and control of risk, especially in the context of trading wholesale electric power products in the Independent System Operator / Regional Transmission Organization (“ISO”) and related markets.

The Role

The Risk Manager will assist API in managing the risk resulting from trading in the ISO wholesale power markets and in related markets outside of the ISOs’ control areas, including a variety of power and natural gas markets. 

Specific duties of the Risk Manager include:

Be the leading subject matter expert on risk management at API:

• Nurture and instill the culture of capital preservation, respect for, and attention to risk management throughout the company.
• Understand, develop, and implement comprehensive principles of risk management across market, credit, operational, liquidity, and regulatory risk sources.
• Stay up to date with the latest risk management practices, tools, and procedures and use the applicable insights to improve the company’s risk management.
• Effectively and promptly communicate key innovations and developments in risk management to support API’s strategic direction.

Ensure compliance with internal and external policies:

• Deliver internal risk reports.
• Manage the company’s external risk compliance requirements.
• Follow best practices when appropriate, follow custom-built practices when needed.
• Support the company’s compliance with ISO and government rules and regulations.

Maintain the company’s risk measurement solutions and ensure accurate valuation of individual positions and portfolios:

• Develop, back-test, and use risk models for market, credit, operational, and liquidity risks to preserve the company’s trading capital.
• evelop models to measure the risks of different individual trading positions, trading books, and commodity-related transactions.
• Estimate and calibrate input parameters for use in risk models (such as volatilities and correlations of forward prices, mean-reversion rates, etc.).
• Evaluate and continuously improve the effectiveness of current risk models through fundamental and technical analysis.
• Work with our IT team to deploy solutions for handling risk measurement and valuation of individual positions and portfolios.
• Support Back Office and IT teams as they implement a variety of trading reports, including Profit & Loss, positions, credit, and risk exposure reports.

Work closely with the trading team to measure and manage risks of individual portfolios:

• Ensure that traders avoid outsized trading losses and preserve capital by establishing respective loss thresholds for each trading book.
• Measure and monitor portfolio risks.
• Stress-test portfolios.
• Explain to traders the risk management policies, risk measurements, and controls pertaining to their individual portfolios.
• Calculate and monitor trading capital used by each trading book.

Model credit requirements:

• Understand and document the methodologies of calculating credit requirements by ISOs and exchanges.
• Model credit requirements of individual trading portfolios.
• Apportion total credit requirement by ISO or exchange among the constituent portfolios.
• This role is for remote work and requires collaboration with others during eastern U.S. working hours. Occasional evening or weekend work is also required as a part of this role.

About you

You are motivated by the opportunity to work on some of the most challenging risk management problems in a multi-disciplinary and fast-paced environment in a unique industry. You welcome the intellectual challenges of a cutting-edge power trading business, part of the newly developing industry of alternative investments in energy. You want to manage risk in several constantly evolving energy markets that trade a variety of financial instruments. You have the ability and stamina to create and oversee complex controls that manage risks and preserve capital. You are intensely interested in risk management and want to perform at the highest level in this field.

The following skills and experience are required for this role:

• A deep understanding of left-tail risk and how to manage the risk of Black Swan events
• Mental capacity to stay on top of a large number of trading books of various different kinds
• An ability to keep up with developments in the professional risk management literature, as relevant to our industry and company
• Expertise in setting risk limits that eliminate catastrophic risk while optimizing risk adjusted returns
• Multiple years of experience as a risk manager in the energy trading industry
• Experience with the management, measurement, evaluation, analysis, and control of risk in a variety of trading contexts, preferably in the context of ISO and ETD markets
• Familiarity with the workings of the wholesale electric power markets or else familiarity with commodities exchanges, such as ICE
• Expertise in risk measurement methodologies and models for ISO and ETD markets
• High proficiency in designing and developing risk models
• Experience working with analysts to develop risk models
• Experience working with IT professionals to develop and deploy risk solutions