Help with Physical commodities
Hello Friends,
I wanted to hear your advice. I have an undergrad in Earth sciences, and currently a masters in finance student. I was offered a broker position with an international brokerage firm. The position will deal with biofuels. Since I have no experience and that field and very open regarding my career path (I don't really care what is the job in finance/ business, as long as it pays very well). Could you share your opinion about such a starting career path? can you eventually transition to an S&T division within an IB? What are the potential earnings in your career? what is the common commission percentage? And anything else you would have in mind...
Thank you all!
I used to work at ICAP and these brokers were essentially calling them shelves sales traders. There were a few sales traders that went into interdealer brokering and vice versa, unsure about the physical side of the business but it doesn't relate to what banks do, generally. If you're a rock star broker and make a lot of money, what's the point of going to S&T? Don't get me wrong, brokering isn't a easy business nor is trading but there are brokers that do become traders from connections, maybe not market making but sales trading, possibly.
Quote this. Moreover, why S&T in a bank? You are going to achieve great commodities skills that could lead to position in commodities houses, trading houses, and even CTA/HF
Really hard to understand this "bank myth"
Thanks for sharing your opinion, I guess I have this false impression that compensation in a bank would be much higher. what would be a typical starting salary? and do you think there is room to negotiate base/ commission when just starting?
A few of the richest people I know who are my age and made their money themselves are interdealer brokers.
Same as GoodBread
Rockstar commodity brokers seem to have more money and great lifestyle > anyone else I know in Houston. That said, for every 1 of those there's also 9 clowns trying to convince you they know something or someone you don't and therefore you should leverage them.
As it relates to what you'll learn - I can't speak from personal exp, never worked at a brokerage shop, but my guess is you won't learn nearly as much as you would in a rotational style program at a trading shop or better yet a supermajor. Also why would you AIM to go S&T at a bank?
How would you compare career progression/ compensation/ challenge to different roles such as HF, PE M&A? I never thought of being a commodity broker, so I am a little bit suspicious it will limit my career...
So there is still plenty of money to be made as an IDB. No lie I know 3 guys all 35 easily clearing 2mm in very niche products. BUT at the same time tons of people wash out. A friend of mine got lucky and landed on a brand new desk and pulled in 225+60 base at 24. so YMMV.
Plenty of people fail and if you fail you will find it tough to find another role I think. So serious risk/reward to deal with
Unfortunately this seems to be a standard WSO buzzword post - "HF, PE M&A".
Good brokers add a lot of value but most brokers aren't good.
Solely based on this, you should take the broker job
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