Relevant Background for Physical Commodities Trading

Question

Hi,
I'm currently taking part in a selective finance master's program. I don't have any noteworthy experience in the physical commodities space. Generally, is it even possible to enter this sector without a degree in engineering/chemistry? \

If yes, how should one best prepare (other than of course relevant internships)?

Thanks!

LongTermWarrior · Accepted Answer

I did an internship at a hedge fund specialized in commodities trading. It was a small fund with around 12-15 traders and I really got along with the owner who started the fund by himself and had been a commodities trader for +30 years. He got a degree in business and marketing and started as a clerk at one of the largest physical commodity trading firms (think of Cargill/Louis Dreyfus/Glencore) and spent several years until he got his first job as a real trader. He made so much money that eventually he started his own physical commodities trading house and then a hedge fund.

GMG · Answer

I don't know where chemistry would even fit into the overall spectrum?

Physical trading is bread and butter economics and mid level calculus. Options knowledge is as complex as the maths has gotten for me, and I am 90% sure having studied finance would have helped more than engineering has.

Gets more quantitative with certain products (think power - where they are running complex quantitative models) however your average hard or soft commodity doesn't require that much in terms of mathematical ability.

CaughtShort · Answer

Physical still has a pretty varied background. Today I sit across from a guys who studied, agricultural econ, biology, history, and finance. I've worked with guys who didn't even go to college. If you are in the UK there are more apprenticeship opportunities that would allow you to skip college. like the other comments on here, econ is probably most applicable to the industry. that said, if a resume hit my desk and the candidate spoke more than one language, has traveled, and had good grades, I'd probably at least give him a call. In the Ag space at least, your major hardly matters.

BrianHunter · Answer

It mostly depends on which commodities you trade.

I'm enrolled in a master that combines quant finance and chemical engineering, with big focus on energies and can say that as far as I've seen mostly crude traders have finance degrees whilst gas traders have mostly engineering-wise degrees

But mate trust me, commodities (especially O&G) is a cowboy world, ie as long as you bring and make money you're good. Mostly of them don't care about your background, uni prestige, how you dress up and so on, as long as you make it rain.

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Relevant Background for Physical Commodities Trading

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Relevant Background for Physical Commodities Trading

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