Looking to get some of the opinions of the other physical trade guys in the forum, but anyone feel free to chime in. Given the moves XOM has made, what are your opinions on having another monster trading shop coming into the market? I agree with the sentiment that they arent going to start paper trading, but the change of the company being anything different than a price taker is going to be substantial. I know they are essentially anchoring a new trading hub out in Big Perm. Also there have always been certain market signs, like when the banks are in energy trading times are good. What does
13 Jun 2018
Saw some threads on this but most were a few years old. Wanted to revisit which energy commodities are the preferred commodities to trade among the experts here. There seemed to be a strong preference for NGL / LPGs relative to others such as crude or refined products. Do you still feel the same way or which commodity do you prefer going forward? Do you think some have a brighter path ahead than others and why? Would you consider a marketing or supply role significantly different than a trading role in those commodities? Presumably trading is more speculative, but you are still optimizing
03 Apr 2018
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)
13 Jan 2020
I was offered a job at a shop but I thought it might be a red flag that the company does not require traders to obtain licensure. They also allow you to step into a commercial role after just 6 months in logistics. The company is a market maker for a niche commodity where futures have an open interest of about 200 contracts. Also, I find it strange that the company does not model the commodity to make predictions where the price is going. Rather, they go out into the market and talk to their mills and customers to get a general consensus while factoring in economic indicators. My question
19 Dec 2019
Hi! I worked in origin as a junior coffee trader (physical). I learned the basics of the industry, everything I needed to know about the mkt, was in charge of the company's trading position, how to cup, went to tons of coffee farms and mills, dealt with logistic nightmares, the big roasters, etc. I left to pursue an MBA, and now, trying to get back into it has been difficult. I am about to give up, even though I don't want to. I am looking for any advice and recommendations on what to do next.
11 Feb 2021
Hello physical traders, I have a couple questions regarding hedging: 1) Are all cash moves hedged immediately? I would assume it would be different depending on the size of the merchant firm, but in general, do physical traders immediately hedge price risk, or is there an element of speculation by delaying when or if it gets hedged? 2) It seems that futures are widely regarded as the main method of hedging. Why are options and swaps secondary to futures? Is it because of the ease at which you can take the opposite position? I ask because in crazy market swings, wouldn't futures be subject to
30 Apr 2019
Anyone have any experience with Green Plains? Im trying to decide between an internship offer from them and one from Scoular. There isn't much on them online. Any advice would help. Cheers.
19 Feb 2018
Does anyone in the Physical Trading Space know of companies that are similar to Orian Resource partners? They specialize in institutional metals and mining investment strategies in the base and precious metals space and I am particularly interested in how they structure loans to company's in exchange for off-take agreements where their psychical house can then trade the commodity in the spot market. Essentially they are able to structure agreements to obtain a given amounts of ore at an agreed upon percentage below market value. This gives them a strategic advantage compared to other companies
14 Jan 2020
Hi, I'm in the process of applying to several firms who physically trade metal. I can't perfectly explain why but during an internship at one of the Wall St. biggies I really liked commodities derivatives most, and found products based on industrial metals especially interesting. In the securities space there is a clear hierarchy of firms, probably with Goldman at the top followed by JP Morgan. I'm wondering how industry insiders would rank the physical firms, e.g. is there a reputational difference between working at Trafigura and Glencore? How centralized are these firms? If I'm accepting an offer in some remote office (Traf for example has an office in Peru) would this mean starting my career from a dead end or is it actually a plus to be closer to some mine? Cheers!
06 Oct 2012
Hello there fellow hominids! It's been quite a long while since I came through here and a lot has happened since then. Diving right in the story, last I was here, I was a banker working in a commercial bank in the middle east, running an international banking desk. I called it quits a couple of years back to start my own commodities firm trading mainly chemicals and metals (including scraps). I spent the couple of years putting everything in place for the firm (paperworks, office space, etc..) and gathering up info on how to go on about the business. Thing is that the industry I am trying to
25 Dec 2018
Couple questions: 1. Does anyone here have access to this survey? http://www.imercer.com/uploads/Europe/pdfs/energy_flyer_final.pdf 2. I've noticed in that survey and elsewhere that Origination is a separate role from trading. But judging from books like Metal Men or some comments on WSO, I was under the impression that signing long-term offtake or supply deals was part of a trader's role. Or is it typical nowadays for there to be origination/business development guys who sign long-term contracts while it is up to the traders to figure out what optionalities they can draw on to best profit
22 Mar 2013
Row call! Who here is in Calgary (and more broadly Canada)? I work in business development for a midstream / marketing company. Been at it for just over 3 years now. It's been a great experience with lots of exposure and responsibility (crude oil and ngl/lpg). Been thinking about long term opportunities, may try to eventually make switch to trading physical and then financial (spec). Anyway, I'm interested in setting up a group for energy professionals specifically in Calgary. I've read some of the energy posts here, it seems like Monty has it all set up for Houston. Lots of info out there for the US side of things, seems like having a Canadian presence would benefit everyone interested in the industry and provide a great networking opportunity.
25 May 2011
Hey all, I'm currently a natural gas scheduler looking to transition into physical trading and am considering getting an M.B.A. with a specialization in commodities at the J.P. Morgan Center for Commodities at CU Denver as I see it as an opportunity to enhance the prospect of trading in the future. I am curious if there are any graduates of this program, or if anyone in general has any knowledge of it? It's a rather new school, formed in 2012, so I'm not sure what to make of it in terms of reputation/exit opps. It looks like a very unique school that is trying to compete with some of the
01 Sep 2015
Hey everybody, Forgive the topic title, I know it's silly, but follow me. So I'm plenty familiar with commodities, and will be joining a physical shop soon. My question doesn't so much concern anything with that, but I knew the topic is a popular one on these forums the last few years. My question relates to what amounts to the underlying logic of physical trading in other areas of trading. My understanding of physical commodities trading is, at its core: 1. Sourcing or purchasing large quantities of commodities from the sellers 2. Transforming it in some way (location, time, chemically altering / refining it, and so on.) 3. Marketing said transformed product to a buyer at a markup (hopefully)
11 Aug 2014
Hello guys!!! as someone who is new to physical crude trading and WSO what hedges would you recommend implementing to protect a cargo of Petroleum bought today for future delivery in one region on local pricing with intention to deliver if by sea to a different region on totally different pricing?? thanks for any help..
01 Jan 2013
Does anyone here know much about steel trading? I'm in base metals and I've been wondering why that industry is so separate from the non-ferrous metals sector. Is it because of the lack of a deep hedging market? Steel trading seems to involve a lot more finished products thanks to sheer volumes but billet trading (for which there is an LME contract), doesn't seem all that different from what you might see in copper or aluminum. Anyone know who the 'best' firms are? Sorry for the vague term.
18 Aug 2015
I am supposed to be updating my firm's website and am having trouble wording one of our activities. Does anyone know what the technical term would be for the following transaction; Say you are a commodity trading firm. A mine operator wants to invest in a new mine. Rather than taking out a loan, they pledge to supply you with X amount of tonnes of product at a discount (say some CME coal contract minus 2 dollars) for the next three years, in exchange for the cash to carry out their investments now. Likewise, does anyone know what the technical term for the following, simpler, transaction would be? Commodity trading firm lends cash to mine operator, mine operator pledges to supply trader with X amount of tonnes for FREE for the following 3 years. Any ideas?
20 Sep 2010
I am interested in energy commodities, and had worked in a physical shop, would love to learn more about the paper side as well, what are some of the challenges the paper traders encounter that physical don't?
03 Sep 2012
The only information I managed to obtain from the internet was that a power scheduler "acts as the interface between the grid operators and the traders". Do you guys have any knowledge that could be added to that generic description? I also have a few questions given my interpretation of the above mentioned description: Does a power scheduler submit bids for power blocks/load transmission rights to specific parts of the grid? Does a scheduler contact the grid operator to book power transaction rights from one country to another in order to balance the grid load?? (the daily France-Belgium
07 Mar 2013
Dikembe Mutombo's finger wag always deserved a tip of the hat, but with all the revelations about his gold trading schemes finally coming to light, the man probably deserves a taste of his own medicine. [quote=Forbes]Mutombo was recently involved in a proposed deal to extract more than a thousand pounds of gold from his native Democratic Republic of the Congo, amidst the core of the conflict mineral trade, and sell the haul for more than $10 million. The money generated was to be split between him, Nigerian-born Houston energy mogul Kase Lawal and Third World mineral trader Carlos St. Mary [
19 Jan 2012
Hi everyone, I'm aiming to secure a job with one of the big Ag traders of the world (think Cargill, Glencore, Bunge etc.). I want to learn as much as I can about physical trading strategies at these firms. Can anyone point me in the direction of any resources that could help me out? Thanks in advance.
10 Mar 2014
Out of interest, was wondering how bonuses for traders at physical trading houses such as Trafigura and Vitol are structured? Is it earned on a per trade or deal basis and how exactly is it calculated? Not much info about this online
23 Mar 2018
Hello everyone, Every bank that is financing commodity businesses (abn, ing, bnpp, rabo, macquire, anz, Soc Gen, natixis and other) is active in the energy sector. Some operate only in the energy sector claiming that metals and especially agri businesses are on a much lower scale, thus deals are quite small and financing required is also insignificant (this is impression I got speaking to a couple of bankers in this area). At the same time, ADM, Bunge, Cargill and LDC operate only in agri (except Cargill also trades energy and LDC is active in metals) are the largest existing today physical traders. If the deals in agri were small then I would expect seeing oil traders as the largest ones, while agri traders to be relatively small and maybe even seeing no agri-only shops.
31 Aug 2014
I think I may have mentioned this before... but I think it would be awesome if there was a commodities designation under the Sales & Trading profile tag. Currently guys like myself and EnergyHOU are forced to put "other." Not a big deal but with the growing popularity of physicals and some banks slowly strengthening their commodities desks again (shout out to Citi and J Aron) I think it would be a cool addition to the site. WallStreetOasis.com AndyLouis
29 Jun 2016
I'm in a new role learning the refinery business and was wondering if anyone had any helpful guides on how to calculate refinery margins. I'm aware of the 321, heat and gas oil cracks but if you have some good ideas please let a monkey know.
22 Jan 2011
Hey everyone, I am a scheduler for a small O&G company. I studied economics at a Canadian school and worked a year in an operations role for a Class I railroad after graduation before moving to the customer side. All the people I've heard of going from scheduler to trader on this forum come from pipeline scheduling backgrounds. I schedule refined products and crude oil unit trains by rail for my company. I'm wondering if there is a specific trading shop or oil major that values rail scheduling experience as much as pipeline scheduling? Any shops that have rail movement as a big part of their
31 Aug 2019
Hello All, After reading some of the other threads, it seems that ag trading has slowed down pretty significantly over the past decade. The trade war and Turkey's recession probably didn't help either. But I was wondering what people thought about the possible end to the trade war soon. Will it bring ag back? Is much of the slowdown due to China/US relations? Thanks
02 Apr 2019
I was curious how attractive doing a year or two in operations of a big physical player plus doing a year or two working for the IEA or EIA would be for admission to a TDP program (Shell, Noble, and Trafigura are the only three I can think of with a route-to-trader program). Really, I'm wondering if working for one of the information agencies would give you a competitive advantage over a pure operational background? I know it may be hard to draw anecdotal instances of this, but from anyone who is involved with recruitment for a TDP anywhere, do you think it would be looked upon favorably? I suppose the same logic could be applied to working for the USDA and trading ag.
06 Nov 2014
Hello, Is the goal for a small or medium merchant firm to go upstream? If so, why don't all small to medium firms have upstream assets? I understand the hurdle for energies and metals might be capital and regulations, but what about ag? I am not sure how easy it is to acquire farmland, but it can't be as difficult as buying a mine or well? Or am I mistaken? Thanks!
30 Apr 2019
Hi there Does anyone work (or have worked) at Irving Oil in Saint John, NB? Interested to hear your thoughts on the company, the refinery, and associated job prospects. What is the upwards trajectory for someone there vs someone in Calgary given the same skill set which is largely supply and trading and/or corporate strategy / BD type roles. How competitive are they with pay? (I assume very competitive in Atlantic Canada but less so compared to Western Canada...especially with long term incentives). Interested to hear if anyone is familiar with the place and possibly get an inside scoop to how
20 Mar 2017
Has anyone heard of H-Energy? It is own by the Hiranandani Group who seem to be predominantly in the real estate development sector. They are venturing into the energy space (particularly LNG and crude), looking to export out of Nova Scotia. I'm wondering if anyone has information on them or experience in dealing with them? Headhunter has been calling and discussed an interesting opportunity, but it seems like there are a lot of risk factors not accounted for yet. I'm not sure if they know what they are doing in the energy space but have limited details and knowledge of the company. Maybe some
02 Sep 2014
I have the opportunity to join a oil trader as an analyst with the intention of becoming a trader in the future. Does anyone have any reccomendations on any materials to get me up to speed (books, presentations, websites, etc)? Also any idea of what starting salaries might look like? Appreciate the help!
05 Jun 2015
For a physical firm that does not run a purely flat, hedged book, I'm honestly a little lost on the overall structure/strategy – basically – how are traders initial positions established? My understanding is that a BP, Xstrata, Shell, etc. has its E&P arm that drills or mines for the commodity. From here is where I'm unsure of how the relationship progresses. Do they "sell" it to the marketing/trading arm? How is ownership transferred and how is it accounted for? Also, if this is even remotely similar to how it's done, how are quality differentials allocated? (In my examples my quantities, prices, etc are obviously going to be small and simple) Trader A: 1000 bbls SGC @ Atlantis 1000 bbls WTI @ Midland Trader B: 1000 bbls SGC @ Atlantis 1000 bbls WTI @ Cushing
23 Jul 2014
Hello! I am looking for the best procedure to buy copper concentrate, ship it to a smelter and let him treat the ore and refine the copper in form of A grade copper cathodes, pay the process and sell the copper cathodes to large buyers. I am talking about SPOT deals but can´t find any information about. If you can, please help. Thank you!
04 Dec 2013