Commodities desk ranking

Guys,

What's your ranking of commodities desks? I think GS, MS, JPM and BarCap should be the top four. Any ideas?

Also, when it comes to each products (Energy, Metals, Ags), how does the ranking look like? Any European bank is strong in this space?

Just wanted to open a topic on commod here. Don't think we have a lot of commod people on this forum.

Cheers.

 
Best Response

If you've been paying attention to the news lately, Barclays and particularly JPM have been killing it whereas GS and MS are slumping. I wouldn't make too much of a big deal out of it unless you get an offer to multiple groups. The commodity desks on the Street mostly focus on energy and their ag desks are way behind the ABCD as far as I can gather. European banks are big into financing commodity trading, particularly BNP, Deutsche and up until recently Credit Agricole.

 

No, certainly not, but this is just a penetration survey. When a prospective monkey asks on the forum, I assume he's interested in the reputation, in which case it is still GS and MS all the way.

 

Barclay's metal desk was shut down last year after they lose hundreds of millions on a copper trade. Goldman Sachs has had a lot of there top commodity traders leave in London. Although Goldman is still strong in s&t it is not the same firm it was in 2007. Morgan Stanley has a very large physical oil trading desk in London and is pretty strong in commodities.

Right now the undisputed king is JP Morgan. They have the largest share in commodities and have some very talented traders on there desk.

Another thing to notice is that banks are losing there top traders to independent shops like Glencore, Noble, Vitol. In the case of Goldman there starting there own hedge funds

 
jimz:
Barclay's metal desk was shut down last year after they lose hundreds of millions on a copper trade. Goldman Sachs has had a lot of there top commodity traders leave in London. Although Goldman is still strong in s&t it is not the same firm it was in 2007. Morgan Stanley has a very large physical oil trading desk in London and is pretty strong in commodities.

Right now the undisputed king is JP Morgan. They have the largest share in commodities and have some very talented traders on there desk.

Another thing to notice is that banks are losing there top traders to independent shops like Glencore, Noble, Vitol. In the case of Goldman there starting there own hedge funds

jimz, i can't agree more. I think GS is definitely downward sloping. An industry trend is all banks are trying setting up or strengthening their physical business which has a larger margin.

 

Glenstrata brah!

[quote]The HBS guys have MAD SWAGGER. They frequently wear their class jackets to boston bars, strutting and acting like they own the joint. They just ooze success, confidence, swagger, basically attributes of alpha males.[/quote]
 

Thanks for everyone replying to this thread.

Anyone familiar with commodity index business (some banks call it commodity investor business) ? Who's the king in this business? What do you think of the structuring role (the strategist who designs indexes)? Is it a valuable job/experience? Seems this business only deals with lazy money (pension fund, mutual fund, etc.), do not have much link to hedge fund strategies.

 
killnba:
Thanks for everyone replying to this thread.

Anyone familiar with commodity index business (some banks call it commodity investor business) ? Who's the king in this business? What do you think of the structuring role (the strategist who designs indexes)? Is it a valuable job/experience? Seems this business only deals with lazy money (pension fund, mutual fund, etc.), do not have much link to hedge fund strategies.

Anyone can comment on the commodity index structuring and designing role? Is this a valuable experience for entering into hedge funds, say CTAs or global macro funds?

Thanks everyone.

 

as long as there's geopolitical strife, energy is going to be pretty hot... other than the usual suspects (j aron, morgan stanley), bank of america and deutsche bank have fairly strong natural gas desks.. though Foster Smith of DB is moving to JP Morgan to head their gas and power trading desk. along the same lines, jp morgan is apparently looking to greatly expand their commodities business and is looking to hire like 50 people to their team.. same with bear stearns and BNP paribas. RBC is partnering with Sempra to trade commodities as well, so might want to check them out.

if you don't mind an environment that's more eat-what-you-kill, then check out louis dreyfus (diversified commodities), glencore (same), trafigura (oil mostly), vitol (again, mostly oil), etc etc-- these firms mostly deal with physical trading, but they do have derivatives desks as well. not sure if they're only hiring people experienced in the field or what, but i'm sure you can find out after making a few calls... same with oil/power companies like statoil, shell, exxon, etc.. while they have a derivatives presence, most of what they do is physical trading so they might only be hiring experienced traders in the derivatives space.. also, another problem with these firms is that if you're totally new, then you're expected to work on the back and middle office first before moving on to the front.. some of these companies (glencore especially.. just google them) are incredibly secretive and notoriously shady, but no doubt that if you are good, then you can learn a lot and make a lot (glencore made 5.6 billion in profit last year and only has 2000 employees... you do the math)

but with companies like glencore and louis dreyfus, they're definitely a better place if you want to trade a "newer" energy product, like liquified natural gas, petrochems , biofuels, emissions, etc..

 

wow thanks that's very helpful!

where do you think is the best location to start out in for energy derivatives? nymex/merc in the US? or london?

you seem like you know a lot about emerging products, do you have a view on emissions markets (carbon, sulfur, other greenhouses)? is it all hype for the most part?

 

Globally, the top 3 are J. Aron (Goldman), Morgan Stanley, and Barclays Capital. In the US all 3 are located in New York (MS is actually outside the city, but you get the idea).

The rest of the banks are all well behind the big 3, but that said, they are all also planning to grow dramatically. But their offices are mostly in Houston (ML, 1/2 of Deutsche, Citi, etc.).

 

how are the traders that work for energy companies viewed? do they have any opportunity to switch to wall street?

through connections I can possibly land an internship this summer with a trading subsidiary of a large coal company, but i'm not sure if this would even be beneficial...

 

Depends which ags/soft product you want to get into. Most specialize in one type of commodity (Grains, coffee, orate juice, etc) You're best to look for these firms in Chicago

 

Sejara, stop posting crap you don't have a clue about.

Banks are bit players in ags right now, it's a very difficult business unless you own a good deal of the supply chain. Most of the jobs are at the ABCD and NOW firms and some of the big oil/metals traders have been building grain desks. Some softs' markets are still dominated by specialized players, particularly coffee and cocoa.

 
SamuelClemens:
What do you guys think of physical vs paper trading?

From what I've heard, physical seems to be the more desirable role, but that's just what I've read on sites like this one.

So, your point is working at Vitol or Glencore is better experience for entering commod HF/CTA?

 

The best and/or most profitable commodities?

I am a second year analyst in a nat gas trader program. In my opinion I would stick to crude, nat gas, power, or coal. Crude and gas both have liquid financial and physical markets. Also both products are volatile. Power is not as liquid but also volatile. Senior people in my office have worked in cotton and other agricultural products. The markets are not as liquid or as big. Stick to energy. I know nothing about precious metals.

 

Like others have said, in the commodities space it's MS and GS at the top, with BARCAP not too far behind. JPM is trying to beef up their commod operations, but they are still on the outside looking in at the present time.

In terms of desks within commodities, in my very limited experience, Oil Liquids, Credit, Nat. Gas and Electricity are the main profit drivers (pretty much in that order, too).

 

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