BB S&T vs Glencore/Trafi/BP TDP
where should I start if I'm interested in becoming a trader? understand that these are very different roles (financial trading vs physical trading). where should I start if I'm not set on sales or trading yet?
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Like you've mentioned BB trading is very different from physical shops. You've got to decide where exactly do you want to be since they are vastly different paths. For example, doing Ops at a BB will not really help you in becoming a trader but at a physical place knowing Ops can really help you understand the entire supply chain and how it works.
If you want to start somewhere, start with deciding what kind of trader you want to be, what would you like to trade, what really interests you.
BP Trader Development program seems to be the only real program where they actually teach you how to trade. Traf and Glencore you don't get anywhere near a book.
echo this. BP's tdp is the better trading program for juniors by far... is a sort of trading analyst role (like the ones you have at other majors, where you still mainly run reports for traders but at least you get exposure) whilst the Trafi/Glencores one are mainly admin/ops stuff
Shell's one is also very interesting but is for more experienced ppl with some grasp already in the industry
Incorrect for Glencore. Plenty of traders have come out of the program.
plenty = 5%? after stagnating in ops or other support functions?
Lol, did someone tell you that in an interview?
from the glencore grad I have talked to, unlike BP/Shell/P66, Glencore management decides if you get the opportunity to even take the trade assessment.
“where should I start if I'm interested in becoming a trader? where should I start if I'm not set on sales or trading yet?”
dude this doesnt even make sense. Sounds like you don’t know what you want to do, which is fine, but that’s on you to figure out and research. My view is: if you know for a fact you want to become a commodity trader, go to a physical trader. If there is ANY doubt in your mind regarding career paths: whether you want to do sales or trading, or if you ever consider doing an MBA, go to a BB for the optionality and brand name.
if is the first experience ever in commodities, I'd say go for the BB. You will learn a lot on the paper side of the business as well as how trading works and how commodities world as a whole works. Other than the BP's TDP, others wont let you even get close to books and see trades/strategies
If you manage to find a trading analyst position in other majors or smaller majors (i know TOTAL has a few in Geneva, Chevron in London, ENI in London, Petroineos in London etc) is fine but other graduate programs are not this good to get into trading and may require ages for you to get a front office position
can confirm above - most phys shops will have you doing admin/routine work for 5 years or so. Better to start at a bank and take risk sooner.
Agreed but the drawback of joining a bank is not learning the physical side of the business. A banking experience will help if one wants to join execution / hedging desks at a physical shop but without going through Ops its very difficult to get a physical seat. Most of the traders that I've met usually had some sort of physical experience usually through being an operator.
Another way to get into the seat would be to go through risk and ops at an Oil Major but like you mentioned its a looong way around.
Some banks for metals or other commodities have the physical part too, though. and if we look at Macquarie, we've got a great part of the trading coming from physical as well as paper... (they also have trading operators, like trading houses)
however its true that you dont get the physical experience as in shops/oil major and maybe risk/ops there could help more to get into the physical side of the business.
in my company (oil major) the paper desks have majority of people coming from banks/funds/other trading houses whilst the physical desks (esp for products) mainly people with background in oil related business, or from risk, trade control or even upstream with majority of them having worked in the company for years
Citi has a good commodities specific program if you are on the fence about sales vs trading but don't want that put 3 years into preparation.
Citi is incredibly strong in commodities trading and structuring, definitely one of the best banks to start your exp in commodities
BP/P66/Shell if you want a career in phy trading.... you can not go wrong at any
Might be in the minority here but if you want to keep the physical door open you are going to have to bite the bullet and do some ops work. If you truly find that stuff excruciating you probably aren't really cut out for trading physical anyway, and those 3-5 years could make a huge difference in terms of your marketable skills down the line if you ever need to find a new job.
Completely agree. Ops is the only way to get your hands dirty and learn about the value chain and how it can be optimized best.
To be honest I see way more market risk to FO rather than ops or more specific trade support.. even if that happens a lott anyways. But it does make sense, I would prefer having someone that knows my books/strategies and the systems and also know I can trust and has some ambition, before going to pick up from the outside. this is even more true at jr trader level
Not sure why you are limiting your options to oil or energy in general when there are metals and agris out there as well, both of which are arguably better markets at the moment.
The industry is also less under stress from quants/techies and more traditional trading, which can be a pro or a con depending on what your strenghts are.
1) Why do you say metals/ags are better than energy rn?
2) Re: pressure from quants, why aren't commodity markets subject to this?
1) It really depends on the specific commodity and geography you are trading, but in general, agris are much less affected by coronavirus than most other fields. There's disruption on the execution of course, but trading wise, people aren't going to stop eating and margins are good. Metals, sort of the same, though again very commodity specific. Copper, aluminium and zinc are all places to be. This isn't to say that energy is bad, but most people that go into energy hope to become the next big crude oil trader and this is not the time anymore.
2) It's not like they aren't subjected (they influence futures), but once you move to the physical side, there are no quants or algos. The actual delivery from origin to destination involves a good number of people, relationships are personal, you need quality controls and have to deal with a bunch of problems that arise from circumstances. This isn't something you can automate or reduce to crunching data.
I think that also the reason why the trade shops haven't been as susceptible to automation is because they don't need to automate parts of their business to stay competitive. Some of the systems at some trade houses are very retro looking and are still running on Windows 2005 and consist of a lot of manual clicking that could definitely be scripted in some way or another. But like how others mentioned, there are so many moving parts in some of these physical trades such as communicating with the inspectors, brokers, pilots, trade finance, terminal schedulers, operators communicating with traders, etc. that just can't be automated. I definitely think there are some areas of their business which could of course be automated but I think that for the big trade houses, it isn't essential to make their business more quantitative.
Recent interviews with C-level of biggest trade houses suggest otherwise, significant tech investment in MO and BO areas such as post trade, real time risk mgmt etc. Also big diff by firm, would assume incentives to invest in the above at a Vitol which are growing gas/power different vs glencore which is growing metals. Tech requirements for a spec power desk would be very diff than a phys metal business
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