Hi everyone,
I’ve just received an offer from a commodities trading firm in Texas for an internship (well-known ish, not trafigura but apart of bigger o&g company). However, I am not sure what compensation and other factors look like at all in commodities trading, but I have seen that after the development program, traders own their own book. What does this mean for compensation, and what can I expect 5 years down the line?
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Based on the most helpful WSO content, owning your own book in commodities trading generally means you are responsible for your own trading strategies and the profit and loss (P&L) of those trades. This autonomy can significantly influence your compensation, as it often ties directly to the performance of your trading book.
Here’s what you can generally expect regarding compensation progression in commodities trading:
Initial Years (1-5 years): As you start, especially during internships and early years, the compensation might not be very high. It typically includes a base salary and potentially a bonus based on performance. For instance, starting salaries in trading roles can range from $40k to $45k, as mentioned in the context.
Post Development Program: After completing a development program and once you start managing your own book, your compensation can increase significantly. A good trader with 5+ years of experience might earn around $150k to $175k annually. However, this can vary widely based on market conditions, the specific commodities you are trading, and your success in trading.
Five Years Down the Line: If you continue to perform well and manage your book effectively, there's potential for further increases in compensation. Top performers in the field have been known to make upwards of $500k, although such figures are not guaranteed and depend heavily on individual performance and market conditions.
Remember, the key to advancing in commodities trading is not just about hard skills in analyzing market trends but also soft skills like networking within the firm, understanding the internal politics, and consistently performing well under pressure. Each of these factors can play a crucial role in your career progression and compensation in the commodities trading sector.
Sources: Q&A: I'm an Agricultural Commodities Trader, https://www.wallstreetoasis.com/forum/trading/compensation-at-oil-majors-and-physical-houses-for-traffic-desk-and-traders?customgpt=1, What has been your total compensation progression in your career?, Best Agricultural Trading Firm (ABCD), Q&A: I'm an Agricultural Commodities Trader
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