Commodities Trader - Banking Finance and Insurance - Career Advice

Banking, Finance & Insurance

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Bring together buyers and sellers of commodities and help negotiate sales.

Commodities traders are independent agents who work with buyers to negotiate sales of any number of commodities. They orchestrate and negotiate private sales or sales through established marketplaces. FutureGrowthModerate

Commodities traders negotiate and arrange the sale or purchase of physical goods or raw products such as gold, natural gas, livestock, electricity or coffee.

They research and obtain information about particular commodities and market conditions, correspond with their clients about the purchase and sale of these commodities, negotiate delivery, condition, and other settlement guarantee details, and calculate and record the cost of transactions. They may also be involved in spot trading, where the delivery of goods takes place immediately, as opposed to future delivery, which is the way other commodities trading is undertaken.

ANZSCO ID: 222111

Alternative names: Commodities Broker,

Specialisations:

Energy Trader: acts as a broker between buyers and sellers of energy commodities on an exchange. As an energy trader, you trade futures, which are a contract to purchase some asset at a future time. For energy traders, the asset you contract is generally some amount of liquid gas, oil, or natural gas. Much like a stockbroker, your responsibilities include tracking commodity prices, predicting market trends and changes, and making informed decisions on what purchases or sales will make the most profit. Commodity traders make most of their money from commissions, so staying on top of research is crucial in this field.
Grain Buyer: builds relationships with producers on behalf of the company they represent or are employed by allowing them to purchase the producers grain at a fair price.
Livestock Trader: sell, buy, and select livestock for individuals and companies.
Media Buyer: negotiate and buy advertising inventory for clients. They ensure that ads reach target audiences through high-quality channels at the lowest possible prices. They are effective negotiators, critical thinkers and able to establish trust and build rapport with clients and media professionals.
Wool Brokers: are the agents for woolgrowers in selling their wool, and are the auctioneers for their client’s wool. They also provide vital services to the Australian woolgrower, including farm supplies, advice, market information and market intelligence, assistance with forward selling, clip preparation, ram selection and so on.

AWI Superfine - The Broker
https://youtu.be/WtabjdeJ3SU

Knowledge, skills and attributes

Suited for those with a good customer service skills and excellent communication. Knowledge of economics, accounting, commodities, stocks, shares and financial markets is required.

Self-control is crucial, as well as the ability to regulate emotions despite developments that could be upsetting.
Accurate record-keeping is important for trader accountability and for learning and improving.
Analytical Skill: Traders need research and analytical skills to monitor broad economic factors and day-to-day chart patterns that impact financial markets. One skill every trader needs is the ability to analyze data quickly. There is a lot of math involved in trading, but it is represented through charts with indicators and patterns from technical analysis. Consequently, traders need to develop their analytical skills so they can recognize trends and trends in the charts.
Research: Traders need to have a healthy thirst for information and a desire to find all the relevant data that impacts the securities they trade. Many traders create calendars of economic releases and set announcements that have measurable effects on the financial markets. By being on top of these information sources, traders are able to react to new information as the market is still digesting it.
Focus: The ability to focus and concentrate, particularly in a chaotic, fast-moving environment, is an underappreciated but crucial skill for traders. Focus is a skill and it increases the more traders exercise it. Because there is so much financial information out there, traders need to be able to hone in on the important, actionable data that will affect their trades.

(Source: Your Career)

Duties and Tasks

monitor commodity prices, trends and other factors affecting the supply and demand for commodities
build relationships and contacts within relevant industries
maintain up to date knowledge of developments within relevant industries
negotiate the purchase and sale of commodities such as grains, wool, minerals and metals.

Did You Know?

Image provided by Visual Capitalist in 2016

markets

Elements such as gold, silver, copper, palladium, and platinum are traded continuously in the form of contracts for differences where investors make money with the difference between the opening and closing prices.

Metals are classified into two types, precious metals, and industrial metals. As metals are critical components of final products, their price fluctuations come after recession concerns, public health problems, risk aversion, etc. Gold is considered a safe haven, so any time when investors become worried, they run to buy gold.
(Source: MiTrade)

Working conditions

Work is usually in an office but there may be travel to meet with clients or to bid at a stock exchange or trading floor.

They work for stock broker firms or futures commission merchants (FCM). Their work is fast-paced and they must make quick decisions about trades based on client interests and market trends.

Commodities traders are responsible for large sums of money and may feel pressure to facilitate profitable transactions as they buy and sell a commodity. They may work with executive management to strategize and complete trades for large-scale clients.

Commodities traders generally spend most of their time in trading rooms or commodities exchanges, but may also work in office environments. Many commodities traders also travel to meet with clients. They usually work long but regular hours that coincide with the hours that commodity exchanges across Australia or overseas are open. They may have to sit or stand for long periods of time, and when working in commodity exchanges their work environment may be stressful. Although they mostly work in cities, they may work independently from finance companies and can therefore work in other parts of the States or Territories.

Tools and technologies

Commodities traders spend a large amount of time on the phone. They also use computers, in particular financial tracking and data management software. They also use mobile phones and laptop computers to stay in touch with their clients and key contacts while they are travelling or away from the office.

(Source: MiTrade)

Education and training/entrance requirements

To become a commodities trader you usually need to study a degree in commerce or business majoring in accounting, commerce, economics, finance, financial planning, or actuarial science. Most universities in Australia offer relevant courses. Some businesses are looking for people with degrees in math, engineering, and hard sciences rather than simply those with finance backgrounds.

Commodity traders who provide personal advice to retail clients about commodity sales or purchases must adhere to the professional standards for financial advisers introduced by the Australian Government on 1 January 2019*.
*From 1 January 2019 changes to the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017 mandate that every person entering the profession of financial planning (i.e. financial advisers) must complete a minimum Bachelor degree approved by the Financial Adviser Standards and Ethics Authority. VET graduates may potentially have modified employment outcomes as they will no longer meet the licensing requirements to be employed as a financial planner, financial adviser or any occupation that directly provides financial planning/advisory advice to retail clients.

Did You Know?

Repaying Credit Debt

This investment isn’t a typical one but can still save hundreds or even thousands of dollars. The moment you pay off your credit card debts, your interest and required repayments disappear and you’re left with 0% owing. From a typical credit card, this is a 12% return on your investment, far higher than anything you’ll typically find on the stock market.

So if you do find yourself with some spare income, definitely take the initiative to use it to remove your credit card debts. The faster you pay them off, the less money you’ll lose to interest, and the more you can put towards investing in something that will grow in the long term, like compounding savings accounts or the stock market.

Those who are struggling to pay off their credit card debts will find it’s hindering future investments, so your best option is to simply sit down and take some time to devise a plan and re-budget your lifestyle with a prime focus around getting rid of your high-interest credit card debts. Once you have developed a plan, it should become far easier and more efficient to remove it and look towards investing in better things with long-term returns.
(Source: Learn to Trade: Top Investments for Young Australians)

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