Commodity broker
Job description
Commodity brokers buy and sell physical commodities (crude oil, grain, metals, coffee, sugar) on a commission basis on behalf of private and commercial clients. Making money for clients should be the main goal of a commodity broker as they earn a commission on every trade they make. They balance the objectives of producers/buyers who are seeking consistency and speculators who accept risk in the market.
In addition they also deal in derivatives (futures and options), which are based on physical commodities.
Work activities
- Monitoring international market performance by reviewing trade media.
- Interpreting market reports.
- Meeting with clients and providing investment advice and market recommendations.
- Trading on behalf of clients.
- Liaising with transport, shipping and insurance companies.
- Devising hedging strategies.
- Visiting international suppliers.
- Negotiating price, specification and delivery details.
- Investigating new business openings.
Work conditions
Travel: travel during working day is occasional. Absence from home at night is rare or never. Overseas work or travel is occasional.
Working hours: long with regular extra hours but not normally weekends or shifts.
Location: mainly in cities as there are a relatively small number of commodity brokers in Ireland.
Opportunities for self-employment: this is possible but can be expensive to set up.
Typical employers
- Investment banks
- Commodity brokers
- Financial clearinghouses and exchanges.
Career development
Advancement is by servicing more customers, gaining a higher volume of business & maintaining a consistent, profitable customer base. There is a shallow pyramid with few layers of management.
Salaries
Experienced brokers are likely to have a significant proportion of their remuneration contingent on deal profitability.
Entry requirements and training
Specific degree subjects required
Open to non-graduates and graduates of any discipline. Communication skills and the desire to make money out of doing deals are more important than degree subject or class but numeracy is essential.
Other relevant degree subjects
- Accounting
- Agricultural/Horticultural science
- Business/Management
- Economics
- Finance
- Mathematics
- Modern languages
- Statistics.
Postgraduate study
A pre-entry postgraduate qualification is not a requirement.
Training
Training is traditionally on the job. For some broking jobs (such as in grain) the relevant trade association will arrange continuing professional education.
Tips for applications
Try a direct approach with a speculative application. Work experience is also recommended. It is useful to develop contacts through vacation work with a trader or a broker, informal visits and visits to the markets and exchanges. Advertised vacancies are few and far between.
Skills and qualities
- Ambitious, competitive and determined.
- Excellent numeracy skills.
- Ability to negotiate.
- Ability to react to market movements and respond to client needs.
- Good judgement and an entrepreneurial flair are essential.
Further information
Website carrying job advertisements
Further sources of information
Understanding commodity brokers