Commodity Trading Comp
Seeing if there are any other physical traders who can give me some insight on comp at other trading shops. If you don't want to post on here then maybe send a PM.
A little background for me was an analyst for about 6 months, then moved into a physical trading role (got lucky quick). I started out originating about 1.5 MMT of grain in North America direct from elevators, and also handled freight trading and river logistics to vessel loading ports. Now I also manage merchandisers buying direct from farmers along with this. I handle pricing for all sales to destination markets and making domestic sales. Also I manage the risk for our desk, manage the futures/hedging and the hedging for all other grain desks. I have been in my role for about 5 years now(Also not located in the south/midwest so COL is not cheap). My base is around 80, also do prop trading and made about 500k and get 10% from the prob book. Physical PNL was around 15M but get no bonus off physical.
Sounds like you need to swing harder in prop, if thats the only way for you to get paid
So when you trade physical, are you putting on views of basis, or is it more you have the merchandisers let you know when there is riskless profit to be had and you just put together insurance and logistics? If you are putting on views with physical that are "risky" kudos to you and I would try to convince your boss it is similar to prop profits. I might be giving terrible advice, but maybe look at delegating to merchants and grow the prop book? What the hell do I know though
I am putting on the views of basis myself. I bring the pricing out to my team and let them purchase from farmers which might only account for 5% of what I am buying/selling from elevators or other trading houses which is based upon my thoughts on market direction whether it is flat price or basis. Also a lot of it is purchasing flat price then creating basis, with options/futures, pricing then giving price + margin to sales and them selling to the export market.
Bro not trying to be a dick here but how does your ass feel because I think you’re getting fucked unless there’s some extraneous circumstances.
dude you are basically the entire grain department and you are only getting paid 120k?? Your management must love you......what a steal!
I used to work at an ABCD as an ags trader for a few years, his comp numbers are more than in line and anyone disagreeing clearly doesn’t work in the industry, 130k all in is standard for a jr trader with 3-4 years experience. Also, 10% of pnl from prop is a pretty amazing payout, usually it’s 5% of pnl - costs - salary for the more sr guys
Have heard of jr guys running a book that usually makes 10mm, having an amazing year making 25m, and receiving
that comp sounds like more Adm or bunge than carg or dreyfus lol
Nope
I get that 10% of prop is nice, but he should be making a bonus of some type for his physical. Obviously not 10% and it should probably be
This is true of pretty much any commodity and firm except maybe power/natty where there are a lot more seats. Money overwhelmingly flows to the senior people with the jr guys getting just enough to bare with it and hope to move up someday. Also, don't overestimate how much most physical books make. Even the biggest books are grinding it out most years. The eventual banger year occurs during major market dislocations (oil contangos, changes in tariffs, droughts...).
A lot of firms are willing to lose money on the physical to make money in paper. Not a sustainable long-term practice but too often the case.
How long does it take to become a jr trader?
This is what I kind of figured, and the amount of seats in the ag industry is incredibly limited so I am bearing with the okay pay and getting as much experience as I can out of it. I think another issue for me is where I live there are basically no commodity trading firms in the region.
PM me
How long does it take to become a jr trader?
Depending on how asset dependent you are, it seems like 200-300k all in would be more fair.
I’m interested in what factors you take into consideration when trading from prop side. Sorry to go off topic. How do you truly evaluate risk and profit probability.
I do some value trading in commodities, it makes it easy when I can see where physical/basis prices are going from what domestic consumers and customers in export markets are paying. Most of the time I am selling puts/calls and sometimes buying/selling outright futures. I will mix in some technical strategies as well but that is just to verify my thoughts on price direction. I think my best trade last year was selling deep ITM puts because I knew the product was grossly undervalued and made around 275K~.
My risk here might seems incredibly high but I saw on farm prices were sky rocketing due to a couple large domestic's who are never short being incredibly short so I saw it as a no brainer and supply was dropping drastically due to yield issues on the farm
This is what I kind of figured, and the amount of seats in the ag industry is incredibly limited so I am bearing with the okay pay and getting as much experience as I can out of it. I think another issue for me is where I live there are basically no commodity trading firms in the region.
Wow the comp is actually bad. What's even the point of going into commodities if you could make much more at the junior level and get your own book at S&T. Must be only for sheltered farm boys.
Who says you dont get your own book as a junior? S&T is 2X the pay but also 2X the COL and 2X the hours worked, different strokes for different folks.
Previous threads on here and people I know who've worked in S&T will tell you that you have a much higher chance of getting a book as a junior in S&T than in commodities at least on the physical side.
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