Hello all. I am new to this forum and I could barely sleep last night browsing and reading so much information that has been shared on these discussion boards. What a jewel of a forum.
I am currently a Physical Commodities Trader at a small shop. I started here and grew from the ranks to become a full fledged trader in 2 years because of my performance. I now have been over 4 years in the industry and developed a substantial book for my company (worth maybe 6-8% of the yearly revenue and profits, this is around 2MM$ in profits that I produce)
However, after comparing compensation with what i’ve read here, I just confirmed that I have to make a change and go into a bigger company. In order to do it I have to change commodities, there’s no choice (non compete).
I know the ins and outs of my current commodity. My type of trading is more of a purchase/sale and market maker trading. We do many long term contracts and we fulfill on a monthly basis. We also do a lot of spot back to back deals on a day to day basis. We do not speculate on paper, only hedge our shorts/longs with futures in order to protect our gross margins (currently they are between 5-10%)
So my questions are:
1) Do you see possible for me to transition from being a trader at a small shop to being a junior at a big one? I like Ag very much but also believe that Energy is a good and lucrative field.
2) If so, what is the best path for me? What would you recommend?
3) I would like to understand the specifics of trading in Ag and Energy. Like literally how a physical transaction happens with examples and also information on the hedging side.
Can you recommend me books that have this level of specificity apart than just an overview of the commodity (which is also valuable)?
Thank you all in advance!
The Art of Grain Merchandising is probably your best bet in regard to better understanding physical transactions in ags. I think Oil 101 may have gone into it a bit on the energy side but can't recall.
Thanks
Give us an idea of what you currently trade.
I trade niche metals. Can't go more into detail than that as my industry is sort of small.
Possible then to look at the more “relationship” end of energy. More like origination roles. So lpg/carbon/physical crude to some extent. You may have to take a slight step back vs where you are.
for #3 look at “energy trading and investing”. These roles similar to niche metals is going to be more marketing and one-off contracts.
bump
Hi I am curious about what you meant by no chance to trade the same commodity at a larger shop. Does the non-compete forbid you to trade forever?
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