How Did Bill Perkins Make His Money?

Bill Perkins says the first pool of capital came from trading natural gas derivatives, not from buying barrels and reselling them. He started as a clerk on the New York Mercantile Exchange floor, then made moderate money as an over-the-counter broker and hated the work. When deregulation hit in 1995, firms recruited people from New York to run derivatives desks in Houston. That move is when he started making real money as a trader.

The desk is closer to insurance than to a contest with every other smart trader. Ahead of winter, buyers fear prices will rise and pay for futures that lock in a hedge. Perkins was generally short, because that winter risk premium usually bled out and prices went down. Most of the money he made came from being short natural gas over time. He was personally making money as an employee, which he calls one of the few jobs where someone can get pretty rich while still working for someone else.