Commodities desk: Trading/Structuring/Sales -Anyone can explain the difference for each?

Hi,

I wish to understand the different functions of trading/structuring/sales in commodities trading desk in an investment bank. Any experienced people can explain to me the usual job scopes/daily tasks for each of the above mentioned roles? Thank you!

Also, how does trading in commodities in investment bank different from physical trading house like trafigura,etc? What is the similarity also? Thank you!

2 Comments
 
Best Response

To be fair, given that banks are not as invested in the physical commodities space as they once were, many of the commodities S&T role functions are typical to other asset classes. That said in terms of technological landscape, I would say bar the highly liquid energy and metals derivatives most other commodities products are less automated simply because there is not much liquidity there. I will leave it to someone else who works on a commodities desk in a bank to describe their daily work routine.

Interesting point I should raise is how physical trading houses are offering similar financial services as the banks. Here are a couple of examples: - Trading houses have started offering trade-finance services such that they can gain extra leverage in negotiating supply contracts for bigger quantities - BP IST offers structuring capabilities in the form of their BP Structured Products arm - Glencore is the first foreign company to trade in China’s iron ore contracts (not sure exactly in what fashion Glencore is participating in this market but I guess its more physical hedging than market making)

In terms of similarities, and I do not intend to make this sound like a cop-out, both parties are closely tracking the commodities markets albeit from different vantage points.

The major difference between trading houses and banks is probably that trading house derive most of their income from the physical product and, for the most part, treat derivatives as strictly a hedging tool whereas banks are less inclined to trade the physical (due to major capital requirements imposed on banks) and make most of their income from offering hedging and risk management services to clients. These differences boils down to mean a physical trader has to figure out the best arbitrage opportunity for the physical product and financial trader has to figure out the best trading strategy for any given market condition.

 

Earum nulla atque excepturi dignissimos recusandae iusto aut nostrum. Odit ipsum exercitationem dolorum quod eligendi. Quas nam ipsum quia libero. Modi magnam nobis amet facilis. Rem et aut et voluptatem iusto et. Omnis iste libero amet ut natus maiores.

Et qui officiis omnis blanditiis placeat. Quod quia sed assumenda ullam ea natus sit. Sunt eligendi quia numquam quasi amet doloribus sit. Repellendus dolores eos eligendi accusantium tempora deserunt. Temporibus beatae modi fugit consequatur reprehenderit animi id. Harum voluptatum est et ut qui nam.

Repudiandae laborum alias at. Eaque consectetur non ipsa reiciendis. Occaecati repellat odio sit et odit.

Officiis fugit veniam saepe asperiores. Sequi consequatur quam minima similique cupiditate vero et. Ut mollitia quidem accusamus repellendus itaque.

Career Advancement Opportunities

October 2026 Investment Banking

  • Evercore 01 99.5%
  • Moelis & Company 01 99.0%
  • JPMorgan 01 98.4%
  • Guggenheim Partners 02 97.9%
  • Morgan Stanley 06 97.4%

Overall Employee Satisfaction

October 2026 Investment Banking

  • Moelis & Company No 99.5%
  • Morgan Stanley 02 99.0%
  • Evercore 01 98.4%
  • Banco Santander 02 97.9%
  • BMO Capital Markets 13 97.4%

Professional Growth Opportunities

October 2026 Investment Banking

  • Evercore 01 99.5%
  • Moelis & Company 01 99.0%
  • Morgan Stanley 05 98.4%
  • Goldman Sachs 01 97.9%
  • JPMorgan No 97.4%

Total Avg Compensation

October 2026 Investment Banking

  • Vice President (16) $429
  • Associates (57) $264
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (28) $184
  • Intern/Summer Associate (16) $161
  • 1st Year Analyst (84) $151
  • Intern/Summer Analyst (76) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Secyh62's picture
Secyh62
99.0
4
kanon's picture
kanon
99.0
5
GameTheory's picture
GameTheory
98.9
6
DrApeman's picture
DrApeman
98.9
7
Betsy Massar's picture
Betsy Massar
98.9
8
CompBanker's picture
CompBanker
98.9
9
dosk17's picture
dosk17
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”