"Physical Trading" in other areas (equities, FI, etc.)

Hey everybody,

Forgive the topic title, I know it's silly, but follow me. So I'm plenty familiar with commodities, and will be joining a physical shop soon. My question doesn't so much concern anything with that, but I knew the topic is a popular one on these forums the last few years. My question relates to what amounts to the underlying logic of physical trading in other areas of trading.

My understanding of physical commodities trading is, at its core:
1. Sourcing or purchasing large quantities of commodities from the sellers
2. Transforming it in some way (location, time, chemically altering / refining it, and so on.)
3. Marketing said transformed product to a buyer at a markup (hopefully)

And of course, much of the "edge" of a physical shop comes from their expertise in each step - such as credible ability to reliably offtake huge amounts of commodities produced, logistics expertise, blending expertise, strategic assets, deep knowledge of local end markets, and on and on.

So, for oil, the logic obviously will go something like: source crude out of Nigeria, charter a vessel, send oil to refiner that you think will like it in the Gulf Coast, and make a few cents a barrel. Hopefully.

I know perfectly well that what I've written above is incredibly oversimplified, and that there are about 100 more steps than that. I know quite well that there is also a huge amount of variation on that core theme, as well as complimentary businesses to those activities (derivatives / market making being some examples) that are also quite interesting.

I'm speculating here, but I think the reason so many people on here might be interested in physical trading recently isn't so much because they have a deep passion for crude oil or iron ore. After going through internship interviews the last few summers, I also know that a bunch of you will never actually want to live in Texas, especially you Wharton kids ;) (Those hilarious responses to the "why Texas" question... classic. Could make a whole new post on just that.)

But I think it is rather because there is an element of "pure" trading (whatever that even means), as well as value added steps along the way that can basically be explained by the concept of real options. It's not really just financial market making, and it's not pure "prop trading."

The steps required can't really be automated - sure, as machine learning grows into other fields, I'm sure it will be a great aid, but ultimately, knowing which refiners need what, when, why, what options they like, what vessels are best, how to best get insurance, why that guy in Africa will sell to you and not your competitor, and so many other factors require deep market expertise that actually adds value.

So, all that being said, I'm hoping somebody could post more information about things like block trading in equities, fixed income, derivatives, and so on. To my very limited understanding, there are some hedge funds that specialize in this, and it's also where the BB banks probably thrive. But who are the big players in each space? What are the comparable steps required in the process? What does a career path for this area generally look like? What is the work like? How has it changed over the last, say, 20 years?

To me, it seems like these are very similar to physical commodity trading. They require the purchase of a large amount of product that a "producer" needs to move. There are a variety of options that the product can be used for once in possession of the trader. They rely on thin margins and high volume. They probably will not be able to be fully automated in the next 10 years. And so on.

I know there are dark pools that make some of what I'm saying irrelevant for purely financial products. Nonetheless, it seems like (for example) an equity block trader could also make the decision to do a variety of other things (does he know a huge amount of retail traders that might be interested in his new block? Does he have better knowledge of pension and mutual fund holdings that could give him insight on where to market the newly obtained block?)

At risk of ranting, I was hoping somebody could post information on traders that do "similar" things (I'm using that term loosely) to physical traders in other spaces. Thanks.