Preparation for Metals trading analyst

Which bank? Is that you, Evan?

Sitting on the metals desk could mean a lot of things. As an SA, you're not licensed to do anything, so you'll be getting coffee/breakfast/lunch/dry cleaning/groceries. You'll also be shadowing a trader or salesperson (don't bitch if you have to sit with sales for a little while--since you don't know anything about the business, you need to see what salesmen do; more importantly, you need to learn who the clients are, where they do business, what countries they have exposure to, where the mines are located, and what currency exposure those clients have).

No one is going to expect you to know much. You're a summer analyst. They expect you to be eager to learn, and to have a very basic level of market knowledge. Ask to start by sitting with a trader of a flow product (spot, futures, swaps). You'll get the chance to learn the market lingo a lot faster that way. If you're on precious metals, you'll learn about the gold and silver fixings (10:30am and 3:00pm in London), and probably see if you can keep the position for the main dealer. If it's a big fix, you'll probably fuck up a few times and get yelled at.

If you work for me, I will bet you lunch every day for the whole summer on some piece of market knowledge. Who is the largest aluminium producer? Where is most of the world's platinum mined? Which metals are considered 'precious?' Which precious metals can you trade electronically? Which are strictly through the brokers? What are the tickers for gold, silver, platinum and palladium? On what system can I see a tradable price in spot bullion? How large are the futures contracts in each metal? What is the most commonly traded base metal? When are the liquidity periods for each of the metals? How many ounces of each metal can the market absorb without shitting itself? What is the right spread in 10k oz of spot gold? How do you price a bullion swap? What is an 'exchange for physical?' When would you use it? Why do futures and spot prices differ? How do you calculate cost of delivery? Why would anyone actually want physical gold delivered to them? How would you make that happen? What are the uses of the platinum group metals? Which equities should you be watching to help determine demand for those metals? Historically, at what premium does platinum trade to gold? What is a call? What is a put? What is a straddle/strangle/risk reversal/butterfly? What do backwardation and contango mean? How can you take advantage of each in the metals space? On which side of the price do most metals producers deal and why? Who are the five participants in the London gold fix? When do the fixings take place, and how do they work? What is the name of every person on our desk, and what do they trade? Who are the central bankers we care about? What is 'event risk,' and how do you mitigate it? What is Var? What is delta/gamma/vega/volga/vanna/theta/rho? If 'riskies' are trading to the topside, what does that mean about the market perception of spot moving forward? How much could you possibly lose in the 20 minutes you are gone taking a dump given xyz portfolio and the current time? And finally, who is your daddy, and what does he do?

If you can answer all of those questions I might just let you punt around a bit in my strategy books (a very little bit). If you're annoying, though, I will pawn you off on the salesmen.

You're welcome.