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Commodity Trading comes up a lot on this forum but Sales doesn't. Does anyone know anything about the lifestyle and work that someone in Commodity Sales experiences?

Comments (5)

  • skins1's picture

    From my experience commodities sales is very different from other sales desks on the trading floor. First, I'd say the experience is not really true "sales", hence why the sales role in commodities is often referred to as "marketing" or "origination".

    At least at the big commodities desks, the sales role relies less on the flow trading of standardized products (e.g. nat gas swaps or options) and more on providing customized hedging solutions for either corporate clients (i.e. hedging) or investor clients. Sometimes the "customization" is simply changing the basic terms of a swap, whereas other times it is structuring new products from scratch.

    In addition, in the commodities sales and structuring roles there is often a lot of crossover between what is traditionally viewed as S&T, and what usually falls under IBD or PE. And example would be you may have a client who is a large PE firm. They are looking to purchase a physical commodity asset, like a power plant. The commodities team will work with other areas within the bank to value the plant, assist with financing, if needed, and then to design a custom long-term hedge. Because of the commodities expertise needed to do so, the salesperson or structurer on the commodities desk is often involved in all areas of the deal, even if their main focus is on designing the hedge.

    I know that's just one example, but the general idea is that commodities sales is much less of a market-drive role in many cases, so you are often attending meetings, visiting clients, etc. versus being chained to your desk all day. That said, hours are the worst on the trading floor. Traders tend to have the shortest hours on the desk, with the exception of power traders who often work long hours. Then the sales people, who typically work anywhere from 7am-7pm at the lightest, to 7am-midnight (especially if you're working in power sales). Then of course the structurers have the longest hours. That said, on some of the biggest desks sales and structuring have merged in some areas, so the dividing line is not as clear.

    Most of this applies to the corporate side, which is the bulk of commodities. You can also focus entirely on the investor side, in which case your clients may be primarily hedge funds. In that case you usually have more of a "traditional" S&T workload. Hours are usually a little lighter, and the basic flow work is a little less quant because you're trading more standard stuff. That said, they can also get access to a lot of cool structured stuff, but the product will be different. Say a long-term, principal-protected option on a basket of commodities, quanto'd into Swedish Kronor, or something like that--that would be on the investor side. Those can in turn be marketed to more than one client, in contrast to a custom hedge that's specifically designed for one client with an actual commodities exposure, and cannot be sold to anyone else. Needless to say, if you work with the latter your hours will be longer.

    Off the top of my head rambling, but I hope that helps....needless to say, when I showed up on a commodities sales desk for the first time I was shocked by how different it was from every other desk I saw during summer and full-time rotations....

  • sighm0an's picture

    The structurers i've seen usually double up as sales to bigger clients. There much few specialist sales, most generalist sales.

  • ambione's picture

    ^^ Do you mean that now most sales in commodities is generalist, e.g. across all different types (oil, metals, ags, etc.)?

  • oversold's picture

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