Physical Trading to HF

Junior Trader in S&T - Comm

I am a physical arbitrage trader with one year of experience as a junior trader (1 year out of school). While I am elated to have a risk-taking position out of school, I am looking to move out of the rural area that I am in, in search of a similar role on the paper side or a seat at one a better shop in NYC or Boston. Is there any shot that I can move to a hedge fund or asset manager or would I have to stay in the physical space? My company only operates in the spot market and trades 3 types of commodities that are not widely traded by the top shops (ie. Louis Dreyfus, Trafigura, Cargill) (Salt, Steal, Lumber). I know that the nature of the physical trading means that you sometimes are stationed in VERY undesirable areas but I need out. What are my exit ops?

Comments (11)

Jan 13, 2020

typically this happens after 2-3 years....where you can move from the rural area to a major city and stay with your firm, or move to a competitor, where your skills will translate well. Prior to that...minimum 3 years...no hedge fund will be interested.

Also, you need to answer 3 questions very clearly
1) whats your P&L?
2) whats your risk limit?
3) whats your largest drawdown?

  • Junior Trader in S&T - Comm
Jan 13, 2020

Are you saying that a hedge fund will not be interested before 3 years, or that a hedge fund will not be interested period?
P&L: On the year, slightly below $1M
Risk Limit: Unsure what you mean by this (the amount that I can spec on?)
Drawdown: Unsure what you mean by this

Jan 13, 2020

1) hedge funds are looking for a track record of 10mm+ P&L per year, for over 2 or more years
2) largest drawdown = largest multi-day peak to trough P&L drawdown
3) risk limit = how much $$ can you lose before your risk manager stops you out.

    • 1
Jan 13, 2020

You're given risk one year out of school? I don't believe that. However, you'll need to be 3-7 years of experience before moving.

  • Junior Trader in S&T - Comm
Jan 13, 2020
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    • 1
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