Recently been interested in commodity brokerage (paper side) as a career. I know there is big variation depending on how good you are but any idea what a decent broker should be pulling? Networked a bit and 300k seems to be an average number. Thanks for any insight into the job
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thats not even an average all-in for a trader
its somewhere between 0 & 2.0mio. i know this is broad but I know brokers at both ends of the spectrum.
Not uncommon for brokers to out earn traders...as much as traders hate to admit that ;)
I would lower your average to more like 150 or so with the rockstars in the upper 6 figs and beyond
Thanks for your reply! Yes, I heared that brokers outearn traders. Any idea what comp progression might look like? 6 figures after like 2/3 years possible if you are good or does it take longer?
you can do 6,7 figures year 1 if you are good... too hard to say what 2-4 years look like
rockstars at my firm clear 5-10mm....
Very interested in learning more.
Is the range and average you provided for paper or physical brokerage or is comp basically the same if you're good?
Thanks!
fresh new hire.. i have seen 35k to 70k
from industry with relationships 80k-400k
proven tier 1 broker huge sign on, huge base, huge bonus
proven tier 2 broker 100-300 sign on, huge base, modest bonus
tier 3/4 broker , no sign on, decent base, small bonus
Do you think it’s best for those wishing to enter brokerage to start in an analyst/scheduler role in the commodity industry? Or have you seen individuals become successful starting out in brokerage?
I think in the commodities space you will have more success coming from industry but I have seen several roles do well. Obv ex trader is best path but I have been guys from schl and ops roles as well
Always thought the bonus is the most important part of a broker's salary. Is that different for commodity brokers or is the salary a draw and that's why the bonus is only "small" when the base is "modest"?
correct... lot of lower tier brokers will cover their draws but wont make much bonus.... good brokers are covering their draws in a week and balmo is all bonus.
Monty I just sent you a PM
DM me if any specific questions
Being a broker has massive variation, akin to trading. There are guys out there clearing $5mm+ a year, but it's a huge tournament system. There are very few guys making that much, and the median comp is a lot lower.
I don't have hard numbers but I would guess avg comp is like 400k ish but median is like 250k ish.
I don't follow every commodity, but in my space, there are about 20-30 shops with markets but the top 5 guys are like 85+% of the volume.
The big upside is that being a broker doesn't require much in terms of credentials, because it's almost all commission. You can be good by being personable, knowing the market, or understanding where the clearing price for something will be.
The biggest issue is that a lot of junior brokers either get bad clients as their coverage, or aren't patient enough to wait for the 22 year old they befriend to get their own book and run their risk. It can be an extremely lucrative career, but there are way more failures than successes; you just don't really hear about them.
So true, most of my brokers were passed on by senior traders and now my brokers are a few years away from their retirement...not that many young brokers to backfill those guys from what I've seen. If a young guy can get these older brokers to recommend them when the old guys retire...that young guy will probably have a ton of deal flow.
what product?
crude vol
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