Commodity Trader? Career Path?
HI there!
I recently graduated with a Bachelor of Commerce from a Go8 university in Australia and received an offer for a position as a commodity trader at a top energy company in Asia. I will likely be handling LNG Gas or electricity. Initially, I'll be dealing with Physical commodities, with the expectation to transition to Paper trading or both.
I have several questions.
1. What are the exit opportunities like?
2. How easy is it to move to BB or HF later in the future if you start on their trading graduate scheme?
3. Career options and prospects after obtaining an MBA or Master of Financial Engineering.
4. Are you satisfied with this job, and how is the WLB?
Cheers!
Congratulations on the offer. From my own experience as an intern last summer and from recruiting and speaking with traders the path to trading is usually quite long out of undergrad. Typically you would start with middle office roles in combination with some analysis as a graduate. Typically you would rotate around different roles and teams. Equally, an operations role for physical trading teams is often a path taken to then become an analyst/ junior trader, then eventually move to trading yourself.
Therefore when it comes to exit opportunities they vary dependent on how long you stay for, but you would need about 2-3 years of experience before you can move. This is probably as exits are not as structured as IB to PE, as the value of an analyst/ junior trader leaving (after 5-6 years for example) is much greater than somebody who has only 2-3 years rotating. I think this may be as you have more of a USP through good knowledge of a specific market instead of 6 month rotations of many roles and markets. Lastly, I know that many BB commodity desks are very different to prop shops or energy companies as they apparently largely market make and cannot take positions in the same way.
I cannot speak for much else.
Thank you for your comment. Would you recommend a career as a commodity trader?
Looking to the future, I am considering obtaining an MBA or a Master of Financial Engineering and would like to work in North America or the UK.
I have been recommended it by many and do recommend it, given I am pursuing it myself out of undergrad, but I can't speak from personal experience. The one thing I am told is that you have to really enjoy the work / markets you work in. I believe that it has a great mix of understanding markets / instruments, discussion amongst a team on strategies and has an intellectual side that can be very stimulating. However, I am sure these vary based on where you work.
Best options out of undergrad I've been told are Shell and BP as the training is very good and many move to Vitol, Glencore, Trafigura... afterwards. To work in US or UK I would assume any of the oil majors or prop houses would be where you'd target.
I can speak from personal experience. I have been in physical and paper commodities since 2010. I have traded cargo, freight and derivatives for 10 years, living and working on two continents. It’s the best job in the world: dynamic, well paid, fun. But also in this age where AI can threaten a lot of jobs, ChatGPT still doesn’t know what I do about the market. Which acts as a great personal moat to earning potential. Enjoy the ride!
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