Physical Commodity Trading: Useful Accreditations and Skill Sets?

Seeking some advice once again from the physical guys on this forum.

I recently accepted an entry-level role in the physical space. It's a great opportunity, and I'll have plenty of time for learning/development outside of work. So I was wondering: besides networking my ass off and learning the ins and outs of energy shipping & operations, what would be some other skills/accreditations that I can look at in my free time - in order to boost my chances of landing a trading seat down the road?

Would a CFA be of much use in terms of career progression in this case? Or would it be wiser to pick up some additional languages/programming skills?

Would love to hear some thoughts on this from those with experience in the field. Thanks!

 

Learn how to build your own supply demand model. Compare it to how your moving product. Learn why the actual flows are different than your model. Ask yourself why and dig into the reason. Adjust your model based on your findings. Rinse repeat.

No need for any designations. Maybe learn python

 

CFA is essentially useless for this industry. You need to pick-up on why trades are made, start suggesting your own... that takes being observant, sponging up as much as possible of what is going on. Studying for the CFA, or even something more directly relevant like the chartered shipbroker thing if you are doing something that involves vessel transport, any of that would take away from being focused on tha job. Learn as much as you can, read a ton, but don't worry about any sort of certification.

 

Well the classics, Oil 101, King of Oil, Metal Men, Merchants of Grain.

More technical stuff like "Merchandising Grain" which is an agri textbook that does a good job of explaining the basis which is a concept useful in any hedgeable physical market. There is a book about Swiss commodity trading firms.

This right here: https://www.publiceye.ch/fileadmin/doc/Rohstoffe/2012_PublicEye_Commodi…

The Trafi primers and Oliver Wyman research on he field which you should be able to Google.

Traders and Merchants by Chalmin which is pretty outdated but still the only real in-depth book on the field as a whole.

 

Will the CFA designation help you to become a physical trader? No. Will it teach you anything useful about the physical trading industry? No. Is it entirely useless in the industry? I would wager that there is some usefulness depending on where you are trying to go within the physical trading space. There are many career paths once you start on as junior trader/merchant that aren't necessarily direct trading roles, but nonetheless very important where the CFA could be useful. For example, roles more focused on risk mgmt or port. mgmt could find some benefit from the CFA. But i would echo other users; there are better ways to spend your time if your main focus is becoming trader. For some context... I am 2 years into a physical trading job and studying for L2 solely because my boss thinks its a good idea and you want to be on your bosses good side in this industry. Being well liked by your mentor/boss is one of the most critical qualities to progressing quickly within the physical trading space.

 

CFA doesn't hold much relevance in physical trading world. If your desk is involved in international shipping space then I suggest reading up:

  1. Chartering terms. (30,000mt pwwd SHINC BENDS, 24hrs T/T, WWWW, AGW WP , etc.)
  2. L/C payments. (Usance, At sight, etc.)
  3. Your said commodity and the related derivatives. (Index, contract specs, etc.)

There's no magical mumbo jumbo in trading, its all about creativity in how a deal is structured, risk evaluated, and trade executed. This will all be learned in time, and how well you manage it and understand it will be the key to becoming a trader.

 
Most Helpful

Eius cupiditate adipisci eum aut. Distinctio accusamus explicabo maxime velit occaecati soluta. Aut eum aliquid mollitia ipsum expedita.

A sed earum quo quae. Ex et voluptas fugit veniam sed nostrum. Consequatur mollitia soluta error quia. Minima ut ea sed consequatur iste.

Quibusdam nemo hic nobis eveniet. Eum nesciunt officiis odit et.

Reprehenderit ut error quaerat blanditiis eum maiores nesciunt. Veniam aut temporibus asperiores est nemo nihil. Harum culpa commodi qui quod odit.

Have compassion as well as ambition and you’ll go far in life. Check out my blog at MemoryVideo.com

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (145) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Betsy Massar's picture
Betsy Massar
99.0
3
Secyh62's picture
Secyh62
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
CompBanker's picture
CompBanker
98.9
6
GameTheory's picture
GameTheory
98.9
7
dosk17's picture
dosk17
98.9
8
kanon's picture
kanon
98.9
9
Jamoldo's picture
Jamoldo
98.8
10
DrApeman's picture
DrApeman
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”