Funnily enough, commodity brokers deal in physical commodities. Essentially, these expert traders broker commodity contracts on behalf of companies. Typically working for investment banks, clearing houses and broking companies, they trade financial derivatives based on commodities such as oil, gas, metals and food products.
On a day-to-day basis, commodity brokers are responsible for surveying international markets, conducting research and keeping up-to-date with the latest financial news.
They then get stuck into trading commodities for their clients. Commodity brokers also provide expert advice to their clients, as well as implementing hedging strategies for them.
Furthermore, commodity brokers spend a large part of their time visiting suppliers, meeting with clients, and overseeing logistics arrangements for them.
Finally, they are also responsible for building relationships with potential clients and developing new business opportunities.
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Salary & benefits
Entry-level commodity brokers tend to earn between £28,000 and £42,000 per annum. Once you have gained sufficient experience, your annual salary will increase to anywhere between £45,000 and £80,000 per annum.
Some senior brokers can earn up to £200,000 a year. Brokers are also usually given sizeable bonuses and commission payments based on performance.
Working hours
Aspiring commodity brokers should be ready for a career with lots of stress and pressure. Expect early starts and late finishes.
Different markets operate at different times, and this will therefore have an impact on your specific working hours.
You may also be required to travel internationally from time to time.
Entry
Investment banks, commodity broking companies and clearing houses only tend to recruit the very best graduates.
Candidates with a degree in any subject can enter this line of work. However, a 2:1 classification is usually the minimum requirement.
If you study a relevant subject, such as business studies, economics, maths, statistics, operational research or accounting, you may stand a better chance of securing an entry-level position.
Completing an internship or work experience placement with an investment bank or clearing house is a great idea, and pretty much essential for entry into this competitive area of work.
Training & progression
Many commodity brokers start their careers as part of a graduate scheme. These training programmes tend to last around two years.
If you are accepted onto a graduate scheme, the majority of your training will be done whilst on the job under the supervision of senior brokers. You will also have the opportunity to attend in-house training sessions from time to time.
Commodity brokers must be registered with the Financial Services Authority before they can start trading, which means passing a number of exams.
As part of your training programme, you will also be given the opportunity to complete the professional examinations required to become a member of the Chartered Institute for Securities & Investment (CISI).
As you gain more experience and move up the career ladder, you will become an associate and then a senior associate. Some people eventually move into director-level roles.
The international nature of trading means that you may also get the opportunity to work abroad at some point in your career.