Physical Commodity Trading Thread - London

Not many discussions on here about physical commodity trading. Drop down any insights about firms operating in London, career progression, salary, culture, etc.

5 Comments
 

Physical commodity trading in London is a niche but highly competitive field. Here's what you need to know based on the most helpful WSO content:

  1. Firms Operating in London:

    • Major players like Vitol, Trafigura, Mercuria, Glencore, and BP have a strong presence in London. These firms are known for their global reach and focus on energy, metals, and agricultural commodities.
  2. Career Progression:

    • Starting roles often involve middle office (MO) or back office (BO) positions, with a focus on logistics and operations. Progression to front office trading roles typically requires years of experience and a deep understanding of the market.
    • Trafigura, for instance, offers structured graduate programs like the International Trader Programme, which is highly competitive and often requires 2-5 years of prior commercial experience.
  3. Salary Expectations:

    • Entry-level roles in physical trading houses may not be as lucrative as investment banking initially, but compensation can increase significantly with experience and performance.
    • Anecdotally, salaries at the outset are lower compared to financial trading, but the potential for substantial bonuses and long-term earnings is significant.
  4. Culture:

    • The culture varies widely between firms and even desks. For example:
      • Trafigura is known for its high-pressure environment and risk-taking culture.
      • BP may focus more on diversity and structured processes.
    • Generally, physical trading houses are less formal than banks but still maintain a professional atmosphere. Networking and building relationships are key to success in this industry.
  5. Work-Life Balance:

    • Hours can be demanding, often extending beyond the typical 9-5. Travel is a significant part of the job, with traders frequently visiting refineries, smelters, or production sites.
    • Paid leave policies vary, but the industry is known for its fast-paced and demanding nature.
  6. Exit Opportunities:

    • Transitioning between commodities (e.g., from ags to energy) is possible but challenging. Firms like Trafigura are more open to hiring across different commodity classes.
    • Exit options include roles in hedge funds, private equity, or moving to smaller trading shops.

For those looking to break into the industry, internships and networking are crucial. Starting at a larger firm with structured training programs can provide a solid foundation for long-term success.

Sources: can someone give me insight on the culture at a physical trading house (vitol, trafigura, mercuria), Physical Commodity Trading, Transferring Commodities, https://www.wallstreetoasis.com/forum/trading/compensation-at-oil-majors-and-physical-houses-for-traffic-desk-and-traders?customgpt=1, Physical Coffee Trading

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 
Most Helpful

There is a decent amount of discussions on here given the relative headcount of physical trading. Just gotta know where to look (don't wanna sound patronising, but typing "oil" or "physical" into the wso search bar is a great start). One general theme is that if you are not on a structured trader development programme, career progression is a lot more undefined compared to financial trading. You cannot have someone trading $140million cargoes of oil straight out of university. There are a lot more finer details to physical, which necessitates taking up operational/analyst roles before entering trading.

 

Quia odit minima velit praesentium eaque. Odio reprehenderit repudiandae et fuga exercitationem eum ipsa. Rem aut eos excepturi fugiat explicabo incidunt. Adipisci architecto sed tempore consequuntur ex. Earum esse cupiditate laborum occaecati consectetur sint nihil. Dolorem quam voluptatibus nulla numquam provident perspiciatis. Voluptatum eius adipisci sunt a.

Career Advancement Opportunities

June 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.8%
  • JPMorgan 01 98.2%
  • Guggenheim Partners 01 97.7%
  • Morgan Stanley 07 97.1%

Overall Employee Satisfaction

June 2026 Investment Banking

  • Moelis & Company No 99.4%
  • Morgan Stanley 01 98.8%
  • Evercore 01 98.2%
  • BMO Capital Markets 12 97.6%
  • Banco Santander 01 97.1%

Professional Growth Opportunities

June 2026 Investment Banking

  • Moelis & Company No 99.4%
  • Evercore No 98.8%
  • Morgan Stanley 05 98.2%
  • JPMorgan No 97.7%
  • BMO Capital Markets 12 97.1%

Total Avg Compensation

June 2026 Investment Banking

  • Vice President (14) $434
  • Associates (43) $259
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (22) $179
  • Intern/Summer Associate (13) $156
  • 1st Year Analyst (75) $151
  • Intern/Summer Analyst (65) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
kanon's picture
kanon
99.0
4
Secyh62's picture
Secyh62
99.0
5
dosk17's picture
dosk17
98.9
6
CompBanker's picture
CompBanker
98.9
7
DrApeman's picture
DrApeman
98.9
8
GameTheory's picture
GameTheory
98.9
9
Betsy Massar's picture
Betsy Massar
98.9
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”