Commodities broker, but what now?

[Papa Lazarou]

Hi guys,

I’ve read a few of the qualifications threads, but I would like people’s advice for my particular set of circumstances. So if you could spare a few moments to read my situation and offer any advice that would be great.

I work for a broking house on one of their commodities broking desks (Exchange traded derivatives, not OTC). The company is FSA registered and is a registered FCM with the NFA in the US. In my current job we don’t deal with retail clients, all clients are institutional.

Just a little background. I have passed the following (in order)....
• I graduated about 6 years ago. I have a 1st class degree (Computing and Business ) – Not from a Red Brick unfortunately.
• SII Level 3 Certificate in Administration (IAQ)
• SII Certificate in Derivatives. ( Unit 1, and Unit 3), and registered with the FSA under my company as an ‘Approved Person’
• Series 32 (NFA) Only needed to do one bridging exam here because of the SII Cert being recognised by the NFA. So under my company’s name I am registered with the NFA as an ‘Associated Person’. We don’t even have any US based clients, but I asked to do the exam anyway and the company agreed.

Now, I have been working on the desk for about 3 years (having no previous experience of broking). All is going well and I can’t complain money wise for my age (28). However I'm almost 30 and my fear is that when all is said and done other than gaining some experience my above qualifications weren’t hard, and don’t really amount to anything. For example, my friends are becoming chartered accountants, dentists etc etc, and I really don’t have anything substantial that I would call a ‘professional’ qualification. I worry if I lose my job my c.v. doesn't really amount to that much.

With the increase in DMA, whilst the broking houses themselves can grow and profit through a business model based on DMA for clients, I worry that broking is becoming harder and harder for the phone broker, requiring one to find more and more ways of providing added value, for essentially lower and lower commissions. I could be very wrong, but I fear I have missed the boat when it comes to making very decent money in the broking game ( from the stories I hear the real money was made back in the days of pit trading).

I’m really lost for where to direct my career. I’ve always said that ideally I’d like to make the transition over to the other side of the phone and become a trader for one of the clients, on their commodity trading desks, but I’m not sure how likely that would be, or maybe sales.

So a few questions if I may....
1) If you were me what would you look to do? (Please no funny comments like “be thankful you have a job” – I am acutely aware of the current climate and am thankful I have a good job as it is, but I’m ambitious and want to better myself).

2) Would you recommend doing the CFA? Are there any more specific ‘commodities’ based professional exams, as that is the realm of finance I find most interesting.

3) Would you stick where I am – maybe ask my company to put me through the CFA (though I not sure how that would benefit them - and I've never heard of anyone else at the firm taking it), try applying for sales trader roles in banks, get friendly with clients and see if they’d take me on? etc etc

Thanks for any input or advice you might have.
A rather lost feeling Papa.

 

[stuey]

Paps I sent you private message

 

[Pento]

Look into sales trading. Or I'd imagine the best route is to get to know your clients better, build friendships with them and in the future they may be able to offer you a job.

btw as I'm sure you know, broking and trading are very different games. You may leave to become a trader a be ****e, whereas now you are a good broker. Best to make use of what you know and develop your career along that line. I'd guess that sales is the natural route for a broker looking to move on but stay in finance.

 

[Papa Lazarou]

Look into sales trading. Or I'd imagine the best route is to get to know your clients better, build friendships with them and in the future they may be able to offer you a job.

btw as I'm sure you know, broking and trading are very different games. You may leave to become a trader a be ****e, whereas now you are a good broker. Best to make use of what you know and develop your career along that line. I'd guess that sales is the natural route for a broker looking to move on but stay in finance.

Thanks for the advice Pento. I appreciate it. Still very unsure about what to do. Might just speak with one of the clients and ask him for some 'career advice' over a beer and see what he recommends - can't hurt.

 

[Papa Lazarou]

On another note guys, would anyone recommend studying a programming language for trading? i.e. Visual Basic, C++, C#?

 

[ohollihan]

Hey Papa Lazarou what is the best way to get into a commodities brokerage? Is there any firms you could recommend and any particular skills they are looking for? Would appreciate any advice you could give thanks

 

[charliechan]

Hi guys,

I’ve read a few of the qualifications threads, but I would like people’s advice for my particular set of circumstances. So if you could spare a few moments to read my situation and offer any advice that would be great.

I work for a broking house on one of their commodities broking desks (Exchange traded derivatives, not OTC). The company is FSA registered and is a registered FCM with the NFA in the US. In my current job we don’t deal with retail clients, all clients are institutional.

Just a little background. I have passed the following (in order)....
• I graduated about 6 years ago. I have a 1st class degree (Computing and Business ) – Not from a Red Brick unfortunately.
• SII Level 3 Certificate in Administration (IAQ)
• SII Certificate in Derivatives. ( Unit 1, and Unit 3), and registered with the FSA under my company as an ‘Approved Person’
• Series 32 (NFA) Only needed to do one bridging exam here because of the SII Cert being recognised by the NFA. So under my company’s name I am registered with the NFA as an ‘Associated Person’. We don’t even have any US based clients, but I asked to do the exam anyway and the company agreed.

Now, I have been working on the desk for about 3 years (having no previous experience of broking). All is going well and I can’t complain money wise for my age (28). However I'm almost 30 and my fear is that when all is said and done other than gaining some experience my above qualifications weren’t hard, and don’t really amount to anything. For example, my friends are becoming chartered accountants, dentists etc etc, and I really don’t have anything substantial that I would call a ‘professional’ qualification. I worry if I lose my job my c.v. doesn't really amount to that much.

With the increase in DMA, whilst the broking houses themselves can grow and profit through a business model based on DMA for clients, I worry that broking is becoming harder and harder for the phone broker, requiring one to find more and more ways of providing added value, for essentially lower and lower commissions. I could be very wrong, but I fear I have missed the boat when it comes to making very decent money in the broking game ( from the stories I hear the real money was made back in the days of pit trading).

I’m really lost for where to direct my career. I’ve always said that ideally I’d like to make the transition over to the other side of the phone and become a trader for one of the clients, on their commodity trading desks, but I’m not sure how likely that would be, or maybe sales.

So a few questions if I may....
1) If you were me what would you look to do? (Please no funny comments like “be thankful you have a job” – I am acutely aware of the current climate and am thankful I have a good job as it is, but I’m ambitious and want to better myself).

2) Would you recommend doing the CFA? Are there any more specific ‘commodities’ based professional exams, as that is the realm of finance I find most interesting.

3) Would you stick where I am – maybe ask my company to put me through the CFA (though I not sure how that would benefit them - and I've never heard of anyone else at the firm taking it), try applying for sales trader roles in banks, get friendly with clients and see if they’d take me on? etc etc

Thanks for any input or advice you might have.
A rather lost feeling Papa.

I bet youre at Newedge lol!!

Dont worry:

quals - why do your mates want qualifications? money and job security. If youre good at what you do and enjoy it thats the main thing.

Yes voice broking is shrinking, but it wont die for a long time. You could go into OTC if it does in ETD.

A lot of brokers become execution traders for hedge funds. Working large orders - often passing them out to guys like you on a desk, VWAP, etc

ISV's like TT will give you a job for sure and they can do ok.

The important thing is to build a relationship with your customer base so you can take their business if you do move on

 

[shortsell]

Hi CharlieChan.

Do you mind me asking why you bet this chap is at Newedge?

One of my friends has recently applied there having asked me if I knew much about them - I didn't, but said that to the best of my knowledge their reputation was pretty good. Are they known to have a particularly disgruntled staff?

Thanks in advance,

Shortsell

 

[charliechan]

Hi Shortsell,

I know a few people there - most have been with the firm a while. its a good firm, but it's no free lunch! you eat what you kill. i assumed it was newedge as they focus on etd's and only take institutional business, no retail. most of the big fcm's like mf global will look at retail also, or, also offer other products like equities, fx, etc (which in fairness newedge are starting to do as well).

just realised its kind of an old thread. wonder what he ended up doing there.

 

[shortsell]

thanks for getting back to me charliechan, appreciate it.

 

[derivativesbroker]

Hi guys,

I’ve read a few of the qualifications threads, but I would like people’s advice for my particular set of circumstances. So if you could spare a few moments to read my situation and offer any advice that would be great.

I work for a broking house on one of their commodities broking desks (Exchange traded derivatives, not OTC). The company is FSA registered and is a registered FCM with the NFA in the US. In my current job we don’t deal with retail clients, all clients are institutional.

Just a little background. I have passed the following (in order)....
• I graduated about 6 years ago. I have a 1st class degree (Computing and Business ) – Not from a Red Brick unfortunately.
• SII Level 3 Certificate in Administration (IAQ)
• SII Certificate in Derivatives. ( Unit 1, and Unit 3), and registered with the FSA under my company as an ‘Approved Person’
• Series 32 (NFA) Only needed to do one bridging exam here because of the SII Cert being recognised by the NFA. So under my company’s name I am registered with the NFA as an ‘Associated Person’. We don’t even have any US based clients, but I asked to do the exam anyway and the company agreed.

Now, I have been working on the desk for about 3 years (having no previous experience of broking). All is going well and I can’t complain money wise for my age (28). However I'm almost 30 and my fear is that when all is said and done other than gaining some experience my above qualifications weren’t hard, and don’t really amount to anything. For example, my friends are becoming chartered accountants, dentists etc etc, and I really don’t have anything substantial that I would call a ‘professional’ qualification. I worry if I lose my job my c.v. doesn't really amount to that much.

With the increase in DMA, whilst the broking houses themselves can grow and profit through a business model based on DMA for clients, I worry that broking is becoming harder and harder for the phone broker, requiring one to find more and more ways of providing added value, for essentially lower and lower commissions. I could be very wrong, but I fear I have missed the boat when it comes to making very decent money in the broking game ( from the stories I hear the real money was made back in the days of pit trading).

I’m really lost for where to direct my career. I’ve always said that ideally I’d like to make the transition over to the other side of the phone and become a trader for one of the clients, on their commodity trading desks, but I’m not sure how likely that would be, or maybe sales.

So a few questions if I may....
1) If you were me what would you look to do? (Please no funny comments like “be thankful you have a job” – I am acutely aware of the current climate and am thankful I have a good job as it is, but I’m ambitious and want to better myself).

2) Would you recommend doing the CFA? Are there any more specific ‘commodities’ based professional exams, as that is the realm of finance I find most interesting.

3) Would you stick where I am – maybe ask my company to put me through the CFA (though I not sure how that would benefit them - and I've never heard of anyone else at the firm taking it), try applying for sales trader roles in banks, get friendly with clients and see if they’d take me on? etc etc

Thanks for any input or advice you might have.
A rather lost feeling Papa.

Hi Papa,

Have you had much success with your career transition?

I am in similar situation. I worked as a commodity broker for a major IDB for 4 years on OTC products (physical commodities and later options). I have MSc in Economics degree. At one point I had got a job offer trading short term power which I rejected as the firm was located in the middle of nowhere in Central Europe. At the end of last year I quit the job and moved to a small brokering shop which offered me considerably more money. Unfortunately new business has not taken off so I am back to square one.

I am fed up with brokering and looking to move into trading execution. I have been searching for this kind of role on Bloomberg and efinancialcareers.com for past few weeks without much luck. Whenever I speak to headhunter they only want to discuss openings in brokering. As the last resort I am trying to get contact numbers/emails directly from Bloomberg terminal and contact fund managers directly.

If any of the readers have managed to move from IDB to the fund/bank/prop trading firm and could share any advice I would greatly appreciate it.