Most Useful Credentials For a Career In Physical Trading?
As the title suggests; what are considered the most useful post graduate credentials one could attain? I know CFA is primarily for equity research and the CPA is focused towards accounting. I was thinking maybe a Masters in Analytics from Georgia Tech? since we do deal with data alot and its only 10k from a top rated US school.
Was also thinking MBA but im told that's primarily done for networking purposes.
I did not get the memo on lots of good data in physical trading haha. I’m assuming you’re targeting energy and not ags? I’m in ags and I don’t have any credentials beyond undergrad same with a lot of my colleagues but a good chunk also have masters and doctorates for anything under the sky so take that as you will.
Apologies should have clarified I was referring to energy (oil & natgas). I also noticed various different backgrounds, primarily an undergrad in economics, finance, or marketing
You don't need a post-grad degree to get into physical trading. In fact, in some places it might actually be a detriment. Some desk leads will think you're too pedigreed to bother with some of the nuances of physical. You need patience, longevity, and some luck. Physical commodity desks are some of the most blue collar parts of finance, especially at some of the agri or mining majors. My first desk was almost exclusively Big 10 dudes; the best trader on the desk didn't even go to college - came up from refinery ops. Another guy that ran NYH delivery was a history major from a no name college.
I actually think its funny how so many of these commod funds and MM shops are trying to hire all these quant types while the guys with the biggest PnL may have started off interning at a truck stop.
Try to get on a desk as middle office analyst or scheduler, and go from there. The most valuable experience is phys is going to be logistics and risk. When I started off at an oil major, the average pipeline was something like: jr analyst/risk -> scheduler -> trading assistant/jr trader -> trader. At some financially-focused shops open trade slots might skew more towards risk guys, while asset heavier houses leaning more towards commercial ops guys.
I'm at one of the ABCD today and it seems like the pipeline was similar for most of my peers: many of them started off at the country elevator level as merchants or originators before joining their respective HQ commercial teams.
How did you move from an oil major to ABCD? Were you on bio fuels or something at the major?
This is for energy:
Short answer is none. Physical trading is truly one of the most blue collar ish jobs you can find in finance. Not saying you don’t need a college degree. In fact if you’re just getting to apply to a structured program. You’ll most likely be required to have a bachelor, and most of my coworkers have a bachelor too. But that’s it. You prove your worth with real performance and no credentials have nearly the same impact as walking the walk.
Well in case that’s an unsatisfying answer. I do work with three traders who have grad degree. 1 with some master of Econ/commerce(not from the us im not too clear) one with master in math for finance, and one with master of finance. So the conclusion is: if you want, You can find a path into the biz by holding a quant degree. Although it is not the most common path. Most ppl still do scheduler/TA/risk>traders.
Blue collar eh that's an interesting way to put it, but I have also seen this. There's a guy I know who went into the BP trading program right after high school and became a trader, the guy never got a degree. I plan on going the Scheduler > TA > Trader route but even then I do believe having a technical post grad credential would help me gain a competitive advantage.
I agree on the technical part. Maybe I am on the younger side, but what I am seeing is that people do value the technical knowledge you bring to the table. My closest friend and I both get a headstart in our career because we have some programming background. You learn to realize that you became the person people go to if they know you have a relevant background.
Perhaps you can argue that it will be a double edge sword if you don't plan on keeping being remembered as the "technical guy." But I have yet to see this become my concern at all so it's certainly a good thing to equip yourself with that kind of knowledge.
go to a college with a good football program or ivy league
I already did my undergrad, and have worked with one of the large trading firms before (vitol,trafi,glencore)
Worked or interned? Assuming you worked full time I would expect you know enough of the business to get into an Ops/Risk role and work your way up.
Something from Texas A&M. I’m not an Aggie but got a job because my uncle is. That got me started. Fiercely loyal, and massive network in energy.
I see your last post about ops, that is honestly your best answer as to what to do though.
Scheduling does suck, when it’s good, it’s boring as shit, and very easy. When it’s busy or there are crazy restrictions (right now) life is super whack. Chatting counter parties all day, losing space on the pipe because someone cuts you, moving gas around iday, all day. Waiting for finalized cut emails to come out at 5:00 then reacting because the cuts are now somehow worse than they were an 30 minutes ago. Working at least part of most weekends all winter etc…
Our head trader calls it an ‘MBA in Gas Operations’.
yeah it's brutal, and you're always stressed your work even in your personal life. But ive been told you gotta do ops for atleast 4-5 years before moving up
Data Analysis/Statistics/Programming
The better you can comb through the bullshit, automate stuff, run regressions and forecast stuff the better off you will be.
thoughts on python?
Pythons great for pulling data from APIs or scraping it directly, manipulating it into a useful consistent format and building models/statistical analysis. Much better and faster than manually compiling data in excel. Unless you have a terminal connection with Bloomberg excel add-on, ICE Connect/XL etc. it becomes cumbersome pulling data, formatting it, and updating excel sheets manually everyday.
a non US passport, so you can dodge the FCPA
😂😂
for phys gas an underrated degree would be meteorology...CFA is useless and most likely would cloud your judgement imo. No degree has any bearing on phys energy, its all learned behavior/knowledge on the desk in my experience. Some old school power traders are right of the plant and system ops, plug them in with a term guy who understands curve structure and money flows...thats a dangerous team...
Out of SB, but agree. Meteorology would be lethal in many commodities
Ngl we hire some meteorologists and meteorology degree is pretty neat, especially because there’re only few schools that have programs so it’s pretty scarce.
can I ask if a supply chain internship at a tobacco company be useful when applying for physical trading roles?
Not knowing much about what you did, I would say yeah. Would play well for an ag-focused seat I would say. If it involved farmer relations/originations/logistics it would be really good
Yes its partially relevant, especially if you're doing alot of logistics work. I studied supply chain as my major and it did help my case
I think experience as a ship agent, freight forwarder or surveyor is very useful
Ability to drink 16 beers without making a fool of yourself and to shoot the shit are definitely up there.
Serious Q, is it possible to *succeed* in physical trading if you don't drink at all? I'm Muslim but I grew up in London so I'm used to hanging out with my mates without drinking/networking chats but I'm wondering if counterparties would look down on you.
My comment was more tongue in cheek than anything. I’ve never met an adult that actually cares if another person is drinking or not. Really what I meant by my comment is that if you are someone who does drink then make sure you can handle your booze. If you are someone that doesn’t drink then you need to at least tolerate it and still be ready to go out with people that do. And above all, be able to shoot the shit with anyone about anything. Obviously you have to be smart but half the battle is getting people to like you.
Unless you are in FTRs, the more educated you are, the less likely you'll get hired for anything other than IT.
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