Commodities OTC Sales Trader career prospects
I have a question, what are your thoughts on a career in Commodities OTC Sales? I have an offer (mid-level) from a solid broker in the space, mostly to do with commodities so my potential counterparties would be corporates or trade houses looking to hedge commos or fx exposure I would guess.
Any idea whether the comp is decent (never mind the location) and if there are decent career development and/or exit opportunities?
Personally I think there is a lot of room for the OTC segment to grow especially in emerging markets (e.g. a simple structure could be an accumulator, cap & floor etc.) but of course you have to keep building your book, sign ISDAs etc. The overall style seems to be "eat what you kill" that's for sure.
Thanks
Hey there! Based on the most helpful WSO content, a career in Commodities OTC Sales can be quite rewarding, especially if you're naturally driven and enjoy the thrill of making deals. As a trader, you'll be working on basis trades, freight spreads, futures spreads, grade discounts, and more. It's all about working a deal and convincing the person on the other end of the phone that they want to make the deal.
In terms of compensation, it can vary widely depending on the firm, your experience, and the market conditions. However, it's worth noting that trust is a huge factor in this industry. If people don't trust you, they won't trade with you. So, building strong relationships with your clients is key to long-term success.
As for career development and exit opportunities, they can be quite diverse. You could potentially move into a more senior trading role, transition into a different area of finance, or even start your own trading firm.
The "eat what you kill" mentality is definitely prevalent in this industry, so if you're someone who thrives in a competitive, high-pressure environment, this could be a great fit for you.
Remember, this is a high-risk, high-reward industry. It's not for everyone, but for those who succeed, it can be incredibly lucrative. Good luck!
Sources: Q&A: I'm an Agricultural Commodities Trader, Career in Trading, Physical Commodity Trading career: If you started over again., Commodity Sales at BB - Culture, Hours, Career Prospects/Growth?
yeah, this is a Marex/StoneX sort of gig, right? that’s completely an eat what you kill environment where the very few make the most amount of money. it’s a knife fight, salary is commission based and you need to generate a book of clients without much added value.
unless you have the relationships, broker gigs are risky. if they don’t see you making money soon, you’re out.
also in terms of exits, brokers are the bottom of the chain in front office roles for commods. BB traders or physical traders are substantially better positions.
just my 2c
to add on top of the above, sales traders in brokerage companies aren’t really sales traders. they are just salespeople.
not to say that a broker can’t make serious cash. if you have a solid network and are selling the right products, the sky is the limit
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