Financing Trading / Repo to Commods

Based on the most helpful WSO content, here are some insights regarding your situation:

Progression and Compensation on the Buyside:

1. Repo/Treasury at a Hedge Fund:

   • Progression: Moving from synthetic financing trading to a repo or treasury role at a hedge fund is a common exit. However, transitioning to a Portfolio Manager (PM) role from these positions can be challenging. The skill set required for a PM, especially in micro products like equities and credit, is different from what you gain in repo/treasury roles.
   • Compensation: Compensation in these roles can be stable and competitive, but it may not reach the levels seen in more front-office trading or PM roles. The exact figures can vary widely depending on the fund's performance and your specific responsibilities.

2. Potential to Move to PM Track:

   • Skill Set: To move to a PM track, you need to develop a deep understanding of the products you are trading and the ability to generate consistent profits. This often requires a shift in focus from execution to strategy and risk management.
   • Networking: Building relationships within the industry and demonstrating your ability to manage a portfolio, even if on a small scale, can help in making this transition.

Considering Commodities:

1. Breaking into Commodities:

   • Challenges: Transitioning to commodities can be tough without direct experience. The commodities market has its own set of dynamics and requires specific knowledge about the underlying assets, market structure, and trading strategies.
   • Entry Points: Look for roles that value your existing skill set, such as those involving synthetic products or financing, and leverage that to gain a foothold in commodities.

2. Best Route:

   • Exposure: Try to gain exposure to commodities through your current role if possible. This could involve working on projects or trades that have a commodities component.
   • Education: Consider additional training or certifications related to commodities trading to build your knowledge base and make yourself a more attractive candidate for these roles.

Additional Insights:

• Networking and Mentorship: Seek out mentors who have successfully made similar transitions. Their guidance can be invaluable in navigating your career path.
• Performance Tracking: Keep a detailed record of your performance and achievements. This track record can be a powerful tool when seeking new opportunities or making a case for a transition to a PM role.

By focusing on these strategies, you can better position yourself for a successful career progression, whether you choose to stay within synthetic financing and repo/treasury roles or make a move into commodities trading.

Sources: Routes to Buyside PM, Routes to Buyside PM, Physical Trading: Best commodities to be in?, I was in Equities Research for 10 years in Asia – Ask Me Anything, Q&A: I'm an Agricultural Commodities Trader