Commodities Trading - No formal graduate programs?

blender:

The usual caveats apply that it "depends on your product, company, desk and etc" but typically is it extremely difficult (if not impossible) to go from BO to FO in a commodities trading shop.

Does it happen? Of course but granted those few networked their ass off, had stellar performance in their BO roles, probably had a few traders vouch for them, stuck it out for a few years and most of all were extremely lucky.

Keep in mind that in most shops the BO might not even sit on the same floor (or city) as the traders, so face time will be an issue and if you don't physically sit on the trading floor, it'll look strange that you are constantly there. For the most part the BO is responsible for AR/AP and invoicing, you'll get to see the trades after they happen and to be honest you won't really learn shit that you can leverage to a FO role. Finally, never under estimate office politics, every company wants a "go-getter" but if you are hired to do BO work, you are expected to devote 100% of your time to your job--if any part of your work suffers since you are trying to network to a FO, you'll be toast. Plus, it can be a pain in the ass to train a new BO person.

Noble/Vitol/Trafigura all have "trader trainee" programs that you should look into. For shops that don't have these structured programs, try to get into scheduler (operations) or commercial/risk analyst--those guys spend a lot more time with the tradrs.

semi agree with above but you left off the most important thing... timing

blender:

The usual caveats apply that it "depends on your product, company, desk and etc" but typically is it extremely difficult (if not impossible) to go from BO to FO in a commodities trading shop.

Does it happen? Of course but granted those few networked their ass off, had stellar performance in their BO roles, probably had a few traders vouch for them, stuck it out for a few years and most of all were extremely lucky.

Keep in mind that in most shops the BO might not even sit on the same floor (or city) as the traders, so face time will be an issue and if you don't physically sit on the trading floor, it'll look strange that you are constantly there. For the most part the BO is responsible for AR/AP and invoicing, you'll get to see the trades after they happen and to be honest you won't really learn shit that you can leverage to a FO role. Finally, never under estimate office politics, every company wants a "go-getter" but if you are hired to do BO work, you are expected to devote 100% of your time to your job--if any part of your work suffers since you are trying to network to a FO, you'll be toast. Plus, it can be a pain in the ass to train a new BO person.

Noble/Vitol/Trafigura all have "trader trainee" programs that you should look into. For shops that don't have these structured programs, try to get into scheduler (operations) or commercial/risk analyst--those guys spend a lot more time with the tradrs.

Thanks for your help! I've been trying to find information on the Vitol trader trainee program but can't seem to find much on this. Any help would be appreciated on this.

What are your opinions on Gunvor? I'd love to get into this company but there's very little in terms of graduate recruitment.

blender:

Right on monty--timing is critical. Unless you are in a structured program, you have to be patient and wait for an opportunity to present itself (if it ever does).

Vitol hires trading assistants but most of it is through on campus recruiting. Gunvor is another great shop typically recruits experienced traders.

agree 100%. I went from bo to fo and if i tried one month eariler or one more later it would of never happen.

Macro <span class=keyword_link><a href=/resources/skills/trading-investing/arbitrage target=_blank>Arbitrage</a></span>:

I've noticed that a lot of people in Canadian BBs (namely RBC) went from back office to a FO role and eventually prop trading.

That's interesting. How did you find this out?

Start of as a trading assistant and then move up.

I could do that if I wanted, but currently I'm just a trading assistant to pay the bills while I'm in college.

Usually they start from a support role e.g. trade finance / credit risk / ops and move up. It will make your life ALOT easier if you study in any of the 2 universities in the world with the physical commodities specialization. If you are in 1 of the 2 universities, usually the selection process is very dependent on FIT and market knowledge rather than grades. Scholarships/awards are given in the same manner as well. With regards to experience, having experience in boutique firms definitely helps and it keeps you updated on the commodities market as well.

Based on my understanding, the best way to break in is knowing people. Since you will be starting in the support roles, they are more concerned about fit and they are more willing to take you in if they know you. Another example would be Cargill where one of the HR selects candidates for interviews based on whether she likes their names. On the other hand, what you can prepare is constant networking and keeping yourself updated on all 3 types of physical commodities - Oil & Gas, Agriculture and Precious Metals. I would not recommend you to pigeonhole yourself into 1 out of the 3 as the markets is always changing and you will never know what opportunities will come back (and whether you will eventually like the field which you had selected).

The above is just my opinion and I hope it helps. The commodities industry is very small and tight-knitted as well and relationships goes a long way. All the best with your recruitment.

Anyone, please?

BO positions at smaller (relatively speaking) shops like Gunvor will almost invariably come about though connections or a recruiter.

Hard to know how to help him out when you don't even say what year he's in or what he's taking...

'Commodities and Commoditiy Derivatives - Modeling and Pricing for Agricultural, Metals, and Energy" by Helyette Geman and "Complete Guide to the Futures market" by Jack Schwager

Good Luck!

I would suggest that you start reading about oil - there are ton of primers/materials available right now given what has been going on in the market and oil is something that everyone likes to talk about these days

I would suggest that you start reading about oil - there are ton of primers/materials available right now given what has been going on in the market and oil is something that everyone likes to talk about these days

Oil by Sinclair.

Or read the description on the Sunny D bottle and become an OJ trader.

Start trading, whether with real money (which is better) or a virtual portfolio. You will need some kind of evidence you actually have skill. EVERYONE thinks they can trade until they have to do it long-term for many many many days in a row.

Softs is a very small world. I would aim to develop a reasonable amount of expertise on a particular commodity (enough to have some short, medium and long-term views) and meet people trading the commodity of your choice.

In my experience it's a whole lot harder to have an informed opinion on most ags and even more so softs than it is for major bulks like iron ore and coal, or crude oil.

bumps for more advice

will it be easy to make a switch from one commodity class to another (metals to softs) midway in yr career? Assuming i'm unable to land a role in ags and softs. Thanks

will it be easy to make a switch from one commodity class to another (metals to softs) midway in yr career? Assuming i'm unable to land a role in ags and softs. Thanks

I don't speak from experience, just from my own homework . . . like you, I'm outside looking in, trying to explore a move toward trading softs from a completely different non-finance career.

My research on this board and other sources suggests that the answer to your question is NO, it's not EASY to move into softs from another trading field . . . the reason frequently cited is that ag trading is a relationship game, these guys / these firms build a book of business comprised of repeat clients they service, and familiarity with the clients' needs and the firm's ability to trust you filling those needs is the most important trait . . .

Again, this is just based on my homework and some insight from guys I've asked. Of course you can develop good trading skills and habits in another lane, and probably you can apply many of those skills to a new comm, and I think if you can demonstrate that you were a reliable component of another firm's culture that you could bring those same strengths to a new culture . . . but expect to spend some time learning the ropes under a senior, expect to spend some time learning how the new firm likes to do business, etc . . .

I've gathered that guys who trade softs with success can expect to move easily within the softs community but your relationships forged outside of the softs trade may not be of much value inside the softs trade. I'm no expert, but I'm not he outside, and I've spent some time on questions similar to yours.

You might find interesting another WSO thread where a physical softs trader wrote an AMA. I can't remember his username but it's probably a good read for you if you haven;t already seen it.

http://www.wallstreetoasis.com/forums/ama-im-an-agricultural-commoditie…

I found this insightful

I would be curious to hear the answer as well.....

bump

I know somebody who has an internship at Glencore now. Obviously they won't let him trade, but he said he is learning a lot.

international merchants pay just as well. exit ops are just as great if not better than some ibanks.

generally though, you would have to spend a few years in operations and risk management before they move you into a junior trading position so at least at first your salary would be pretty low right?

yes, devin that's basically what happens. You definitely pay your dues in a strictly commodities environment.

+bump