most rewarding physical commodity trading desks?
In terms of most rewarding physical commodity trading desks, what are some of the best. In terms of rewarding, i’ve listed some criteria below:
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interesting and fulfilling (interesting fundamentals, interesting geopolitical situations, complexity, ect.)
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Large upside in the next 25-50 years (a market that is very important for our earths future) - Ags and metals such as palladium, nickel, and copper as well as electricity, renewables and hydrogen
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Great compensation (These desks see great year on year performance, landing good bonuses and / or stake in the company)
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Travel (While many desks in this realm will travel through time, which desks have interesting travel opportunities?
Hahahahahahaha
what? is there something wrong with my question?
Yeah a little bit but not on purpose. You want to know kind of an unanswerable question for at least the first three questions
1. nobody can tell you, only you but very generally most commodities are more similar than you think it’s just the specifics where things differ and knowing the specifics of quality and logistics comes with tim imo but others might tell you otherwise
2. Largest upside goes to those who are good plain and simple not on product. Plenty of people crushing it in obscure products and others killing it churning a million barrels of crude. Just be good. Nobody can predict the unknowable that comes from a technological disruption if that’s what you wanna know but you are free to bet on it as it becomes a known quantity like litium trading but others are thinking the same and all the participants might take away all that free arbitrage and volume you thought you were so clever getting in on
3. Be good at your job and make money
4. Most involve travel but just depends on what neck of the world you wanna go to
i see now that my question weren’t very insightful lol. So basically my main take away from your comment is that physical trading is what you make of it. The effort and hard work you put into it, no matter where you are trading from or what product you are trading, determines how good you will be and what you experience in the industry.
great reply
I've been making this argument to various people in the broader commodity industry for years with limited success. Everyone tends to think that there little niche product is incredibly unique and without 10 years experience in their specific industry there is no way you could figure out how to trade their product. But that's just not true. Futures and swaps work the same regardless of the commodity. Option delta means the same thing regardless of the underlying. Trading mentality and ability to take and wear risk lies with the individual, not the product. The supply & demand fundamentals that move a market are what are unique, but even then, not that unique. All commodities will have some connection to the broader economy. Demand destruction is bearish regardless of the commodity. Things like that are all the same. The specifics regarding quality grades, transportation, storage, physical logistics, etc are all teachable in my opinion. Give me someone with the derivatives knowledge and a smart risk taking mentality and I can teach the specifics of the commodity. Its much harder to go the other way.
Thank you for coming to my TED talk. Rant over.
If i somehow knew how to find the world's ideal job, i wouldn't tell you. I would apply myself
Really does not work like that. This aint BB/EB banking where they ask you what group you like and list your exit opps.
You get told to go sit in a corner and do what is asked, learn etc...go from there.
So guess better question are you willing to work in a commodity you find not rewarding at all, if you cannot then lots of firms are out.
Lol, doesn't really work like that. You can form a view of what commodity has the most career upside over the next 40 years, but that is a trade in itself, and not a particularly easy one to put on.
Hah you got the gist of what I mean. Yes some shops only trade certain things so you could find the think best upside and focus on them...But the Trafs or so of the world you may want to trade LNG and guess what you trading metals if they need to grow in metals want to work at places like those early gotta be more flexible.
Will add on the travel question, gas/power or more quanty/data driven commodities you don't need to travel much.
Yeah. Culture varies. Seems like Trafi or ABCD people move commodities a lot whereas a place like Glencore is very siloed.
Go into power.
1. oil/gas could die, power will only grow.
2. Other markets are too small.
As long as there’s a power market there will be a gas market, unless coal makes a big comeback
Power is especially growing in Asia right now. Lots of places out on the hunt for experienced teams and individuals. I’ve seen it first hand.
Interesting! I though this is the EU thing with Goldman Sachs investment in InCommodities and all those new power trading desk emerging here and there.
My best guess, it is a global initiative among traders trying to diversify. Since the trend is specifically targeting renewable energy and having a strong presence in the electricity markets provides a solid foundation of market fundamentals. It goes hand in hand with carbon/emissions and renewable generation, and the information sharing which can potentially happen with already well setup desks across gas/LNG and coal divisions gives a wide coverage of power generation inputs.
GS used to be in power in Asia about half a decade ago before pulling out, it would be interesting to see if they reestablish a presence again here. Japan (recent), Australia and New Zealand are some major markets in APAC which are deregulated. With places like South Korea and Singapore which is potentially on track for deregulation, APAC is well positioned for some big opportunities.
Any thoughts on BP? Do they have a renewable energy desk? Are they good in the space?
HUGE
Do share
Bumping this to see if anyone has any new responses. Seems like metals would fit the bill, lots of upside due to energy transition across all metals + travel opps pretty interesting (LatAm, Africa, Australia, etc).
I think ag commodities have the chance to be a lot of fun moving forward. If climate change is even a quarter as bad as a lot of people are saying then that is going to mean some seriously weird weather in a lot of places. Too much rain, not enough, too hot, too cold, etc. All of those scenarios lead to crop issues. So there is some serious volatility of supply and the thing about ag markets is that if there is an issue with supply it can last for a year at minimum and most likely even longer. Tight supply for extended periods of time gives a lot of opportunity.
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