Commodities Broker, but what next?

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 in their respective industries, 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.

 

if you are good at entrance exams, and can get in to w or h, then get your mba.....look at kashkari (sp) its late, he went to wharton around 30 with no business background, and landed at GS out of Wharton.

 

Thanks Bluestreek. I'm actually based in London. So you'd advise an MBA over the CFA, based on my circumstances?

 

some cfa`s manage money....but its just basically a glorified f-analyst accredation...actually an ms in finance is the better route, taking all the hassles of the cfa exam into account.

But you want an all purpose door opener degree (that`s what a harvard mba) gives you a la Jamie Dimon...then go into banking, private equity ( it ought to be hot again in 5 years), I-bank, etc---many opportunities.....people put those schools on different tracks provided you look good, can talk, and have good social iq.

 

Laz,

IMO you should be very smart with your personal finances, save money as much as possible and begin trading your own account to learn more about your business.

You can even trade a $50k simulator to gain practical experience. You're right about the brokerage industry...commissions get lower and lower every year. Even on EliteTrader you read all these jabonies who probably never made a profit trading but yammer about nickels and dimes...of course some are scalpers.

Can you take money from the market? Have you observed why some of your institutional clients win and some lose? These are the lessons that are valuable, I believe.

A second college degree would be a waste of your money, unless you're looking to leave trading and enter I-banking.

 

Thanks guys.

Well commodity trading or sales (and potentially a management role in those areas in later career) is probably the direction I'd like to go into. Personally I'm not interested in trading for myself as a local - I would rather a salaried job at a bank / commodity house.

It just seems strange that there's no further qualifications I can get when it comes to derivatives sales and trading? Would CFA be a waste of time for me then? Would a masters in Business or Finance also be a waste of time? And is growing my experience and knowledge of my niche in commodities going to be my "professional qualification" equivalent and I'm getting too hung up about formal education and letters after my name?

Cheers

 

yes but are you local ?

 

Not sure I understand your question?

 

I hear the sentiment here is take your own money and trade with it to learn how to trade?
Thats the most rediculous advice i have ever heard. Anyone can take money and put it on the markets and lose, that doesnt make you a veteren trader.
Its like comparing it to war, there is cross fire comming from the street in front, do you just run across it and hope not to get shot? That doesnt make you a hero or brave it makes you a fool.
Dont go opening up your own account and trading away your money, not bright at all. Why? Because u will either make money and not fully understand how you did it, (like make fresh graduates who go into trading) or you will lose money and thinking you understand how you lost it to make yourself feel better by blaming the markets. (all bad traders blame the markets).
The best way to learn is READ. read read read read and read more. then when you think you know everything, read again. get as many books and online information as you can. then join a desk of experienced traders and sit there and do as your told for a while, then you can trade.

There is not easy path to enlightenment.

 

Thanks for the advice HappyJoe. I agree.

Just to clear things up, I do have my own 'book' if you will, as I work for a broker dealer. I just wouldn't call 5 lot limits on outrights and more on spreads etc anything to shout about - but just wanted to clear up that I can and do trade, with relative success - though I am still learning every day.

I mentioned that I didn't feel trading as a local was a route I could ever see myself going down - prefering a salaried job, and the thread just seemed to go off course from there!!

I guess I was just asking for people's advice on my best route into the banks / oil trading houses - or if people thought it would be unlikely.

Thanks again, and happy trading.