How do I break into commodity trading?

Hello,

European poster here so maybe a bit unrelated for all the Americans:)

I just completed my undergrad at a German university and will start my Master's in Computational Physics in Switzerland in a week. While I am very excited for that, I do feel a bit off with regards to my career after the Master's (will graduate in 2023). As a side info: Doing a Master's is the "normal" way of things in Continental Europe, i.e. you have very limited ops if you don't do it...

One area I have been super interested in lately is Trading, especially Commodities Trading. I think Trading could be my thing because I did quite well at junior sports / music competitions (placed top three in nationwide competitions) and generally perform quite well under pressure. I do not say this to brag, but because I truly believe that trading could be a thing for me. I also enjoy reading about the markets a lot and have been doing so for about 1-2 hours a day for the last 8 months.

Why Commodities? I love geopolitics, basic supply-demand chains, which is why I would like to join a macro-desk. In theory, FX could be an option too.

A bit of Background:

I completed my undergrad with a First, got scholarships, studied abroad in France at a good university and worked in the local finance club. While I am good with numbers, I am no wizard that got the gold medal at IMO, so there is that. I would say that my profile isn't too great, especially after Covid, but I am not exactly sure how I compare to the average applicant.

One problem is that I have no relevant finance experience apart from a Spring Insight Programme in London three years ago. I do, however, have some programming / IT internships and am very solid with Python, C++ and Java.


I would say that Covid, mixed with a bit of arrogance and cockiness on my side, contributed to me having an abysmal last year, which now makes me feel that my chances to land a job in Trading are pretty slim.

On a more positive outlook:

I have two more slots for internships (about 8 months in total) before I graduate, so the time from June 2022 to December 2022. I would love to get as much experience as possible in that timeframe and am ready to work hurriedly to correct my past shortcomings.

Which companies should I look at how would you rate my chances in general? What can I do now to improve them as much as possible?


Many thanks in advance

 
Most Helpful

Lots of resources discussed on these threads already on this topic.  Search for them but basically just apply and network.  
 

On a side note, while sweeping topics like “geopolitics” are on a surface level important there’s not really anything you can do about them, no edge that I’ve ever seen anyone have on them, and they’re not a huge part of the day to day of physical traders.  You might want to make sure this industry is right for you because expectations may not equal reality.

 

Sure- you will surely read about geopolitics (oil drilling on federal lands stopped, Chinese import quotas tightened, etc) but there’s just not that much actionable as it’s happened and everyone knows about it.  You would be much more enmeshed in for example what blend ingredients you can make a profit on, what shorts you can find for your longs, what operational problems are happening, etc.  

 

Thanks! Will certainly apply to as much firms as possible. Is there any specific insight (apart from the obvious) that you can give about CV / Cover Letter? I.e., are there some activities / degrees that are particularly well-regarded? I am asking because I pursued varied projects in undergrad and somewhat struggle to identify the relevant projects to put on my CV, as no one wants to read overbloated stuff.

 

Is a firsts not good? Where is the weaknesses of profile you are talking about, your overall GPA, masters GPA etc? 

You have all the tools and interests to get into it. But the EU and UK programs are very well known to be super picky when it comes to grades/test results.

With the UK near blackout tomorrow good time to learn and jump in...

 

Hi there, thanks for your comment. I'd say the weakness is that I don't have too much relevant industry experience, combined with coming from a non-UK university (i.e. I would require Visa to work in the UK)

Additionally, I have heard that (esp. in the UK) master's degrees are not that well regarded and people prefer to hire straight out of undergrad. 

But I will simply keep on applying und putting in the effort, and hopefully some sort of opportunity will arise from that.

 

Not sure where in Switzerland you are studying but Geneva is the hotbed for physical trading. If you're near Zug even better. Think the best approach for you would be through a quant/risk internship role since trading seats are quite limited even at the junior trader level. But this also means you need to study to at least pass the interview. To get an interview just network like crazy. There are multiple small and big firms based out of Switzerland. Not sure which commodities you want to get into but for Energy I'd suggest you try for Totsa/BP/Vitol. Don't go for Traffigura since you will never ne moved from graduate program to trading roles. Also check out Litasco/Glencore/Neste.

 

Umm have a good understanding of derivatives. Read up the derivatives book by Hull. That's the entry point for derivatives. Other than that also keep up to date with the commodity markets you are interested in. Brush up your VBA/Python skills. You can always build a project in either of them like valuing option strategies once you have learned about them.

 

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