I've been on my desk (metals) for two years. I like it here, i still feel like i'm learning, and i do think i could have a successful career here into the future. I don't want to name names but it is considered in the top tier in commodities. However, i have an opportunity to move to a top trading house in the physical space. What would you do? I think the pros and cons are pretty clear for either but i'd like any opinions on the topic. Thank you.
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If you're at the top of the BB comms world then why switch to a firm which has market-specific recognition, the pay wouldn't be as great down the line and would end up trading fewer kinds of comms? Glencore is very well known but Trafigura is more market specific whilst a BB (e.g MS/JP/GS) is known EVERYWHERE in the world.
I’d switch to glencore/traf.
Commodity trading is their business. To the banks it’s not a core function and funding/risks can disappear if the bankers lose faith.
The only reason to stay at the bank is to switch jobs out of industry later but you’ve already got the name on the cv.
Whilst I have a strong physical inclination, I think that if you are happy where you are AND your still feel like you are learning AND you are in a top-tier player then I think its worth sticking it out till any of these three points no longer hold true. Just in the interest of personal career development, if you are in a sweet spot, which it sounds like you are, then it is best to maximise your experience and learn everything you can for however long you can take it. Considering that you are already good enough to be considered by a top trading house with just 2 years worth of experience, you will be even more valuable and attractive to a trading house once you gain even more experience at your bank.
Moving jobs is always a big task and you should always go for the option that suits you best but I thought I might be able to chime in with some advice. If anything I say does not ring true then feel free to disregard :)
Okay pharma guy is talking out of his ass. Clearly knows nothing about commodities. Trafigura and glencore immediately recongized in commodities. Senior traders there are very well compensated and typically more than at a bank. There a reason many traders at hedge funds have a physical background.
You should ask yourself if you prefer to trade physical commodites or futures? Physical trading is more about location and time arbritrage. You have to consider things like where to source ore for a refiner and where to make forward sales to lock in the highest margin for the plant. Things like that. It's pretty exciting just a different skill.
Read the below link to give you a better idea.
https://www.commoditiesdemystified.info/en/#Commodity-trading-and-finan…
I'll refer you to this post where another OP also states that Trafi aren't well known and most others agree: https://www.wallstreetoasis.com/forums/glencoretrafigura-vs-msjpm-deriv…
Granted, the post talks about entry levels but the fact that not many know about Trafi applies
You are getting into exit opportunities for traders. The exit opportunity for traders is trading. For that trafi/glencore/Vito’s etc are the best. If you want to go into the exit opps ibankers talk about then the name of a bank looks better. Within industry those are big names. For moving around within commodity trading there is no difference in prestige. The big multi strats will consider you; launching a hedge fund is game on.
Realistically it’s 50-50 for opp to move on. It’s better to get more experience where you are at, but also getting into a shop early career with the physical assets is a huge benefit too. I’d lean on switching but it’s really a coin flip
I’d also agree compensation is likely better at the physical guys so getting to a trading position there sooner would be a big deal to me.
What is the job role at the BB, what is the job role at Traf/Glencore?
Trading? Ops/Ex? Risk? Sales?
Pretty crucial information.
I am a junior trader, the role would be as a metals trader. Obviously currently I don’t do any physical.
Is this the Metal Trader job in physical or derivatives? Glencore/Trafi won't put you on a trading seat if you don't have any physical experience - unless the role you've been offered is on a paper desk.
Okay thats clearer - a junior trade role at Glencore/Traf is likely to be somewhat ops/execution heavy (especially as you haven't done physical before) and you will need to learn that side of the business. The likelihood is you would act as a support style role to the senior traders and slowly take on risk over a few years.
Now given the choice I would say trading metals at Glencore/Traf would be a more interesting career role than what I assume is a more derivative focussed, client flow type role. Physical is just way more interesting, entrepreneurial and challenging and can be just as if not more lucrative.
THAT being said the two key things here: 1) you say you are still learning at your current job 2) you have risk and are actually trading
If you don't feel yourself plateauing any time soon then I would stick with the BB for a little longer instead of exchanging for what will be an ops/execution/contracts/trading mishmash role.
agree 100%
If you're not trading right now then which do you feel gets you closer to a trading seat? I wouldn't join the Traf/Glencore if it's not in a trading role unless there's no path into a trading role at the BB.
I am in a trading seat currently (flow and small risk in my own book). How would this affect your advice?
Not an easy decision then. I imagine the trading house route holds more upside for you as you could potentially move to phys. Try to learn about the team you'd be joining from brokers/CPs/etc who deal with their phys guys. The move could make sense but you're entering a cut throat environment and I would want max info possible.
I've only been frequently these forums recently but I see there's a LOT of commodity related stuff now. I'm not really familiar with this area, what's behind this recent surge? A lot of movement in this area?
Its about the only trading thats not electronic left?
Dont go to traf/glencore unless you're already trading. I hear they rarely promote within. They tend to hire experienced traders externally.
I am currently teasing (both flow and small risk in my own book).
Trading***
I don't think that's necessarily true. I have met some of their head guys and they can be pretty young and started off in other places before working their way up. Definitely a bit of an old boys club though with the original guys vs. the new guys and certainly a very competitive environment.
Out of interest, what would be the difference between trader at GS and a trader a Glencore/Trafigura? Isnt it a different business model so how much do the skillsets overlap?
depends on role but could be some overlap. GS will provide a more rounded experience early in your career..... a trading house further into your career.
How easy is it to go from (financial) commodity market making to physical trading?
G-I the pharma guy is a fucking moron - obviously if you're already trading that is obvious to you too.
For one, I'm extremely jealous of you. Sounds like you are in a great position. I honestly think this is a situation where you should just go with your gut.
I would stay at the BB as long as you can... You will prob fail if you move to Glencore or Traf so young in your career..... Stay there and get more exp - Glencore, Traf, Vitol are not going anywhere
I'll echo monty's comments here. If you still enjoy where you're at currently and are still learning things, don't rush a move. They'll always be around, and I have to imagine moving to a Trafi/Vitol/Glencore with a few more years of experience will set you up better for long-term success.
if you are learning in one place and you feel good there I do not see why go to another company just because it is bigger
It depends your long term goals really. Look at Ray Dalio, he started as a commodity trader then after a few changes he set up his shop. The only reason for a change may be that as the firm is considered top tier in commodities, most of the work would be "firm driven" meanwhile if you go to a "top trading house" you might have to have more skin in the game and make a name for yourself. You might start again from the bottom before you get a desk but it'll set you up nicely, in my opinion.
I think that in the commodities space, trading houses offer some of the most interesting work, and the compensation is very good as well once you get a bit of seniority. I would suggest that you wait a bit before making the transition, but not too long. The skill-set required to trade at a physical shop is pretty different from the paper desks at banks, and therefore you would be best served making the transition relatively early into your career.
strongly disagree
Haven't been in the industry for too long but i can tell you that Monty knows his ish! Ignore this man at your peril.
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