What are the Different Commodities Trading Jobs?

Commodities are a popular form of investment. They are contracts whose value is determined the underlying asset. These assets could include agricultural commodities like cotton or wheat, as well as fossil fuel resources like oil and natural gas. Commodity trading jobs can be found at major stock exchanges, large corporations, and small, independent brokerage firms.

Commodity trading is a highly specialized field. To become a trader, you must first obtain a level of certification and licensing specific to the region where the commodities are traded. To become a licensed commodities trader in the futures market in the United States, for example, a trader must pass the Series 3 exam. Futures are a type of commodity contract that trades on a commodities exchange, such as the Chicago Mercantile Exchange Group, and is valued based on a predetermined price.

Some commodities trading jobs are done on an exchange’s trading pits or floor. Trading specialists, for example, might work on a major exchange’s floor. Buyers and sellers of commodities contracts are connected these professionals. These traders are paid commissions based on how they trade, and almost all of them follow a set of rules.

Traders typically choose strategies that they feel most at ease using in any market condition, whether prices are rising or falling. Traders can avoid some of the pitfalls that often accompany emotion-based trading sticking to a technical strategy. Trading firms that are members of a major exchange employ floor specialists, allowing these professionals to work on the trading floor during trading hours. Because member firms typically select a small number of traders to work on an exchange’s floor, these are not the most common commodities trading jobs.

A full-service brokerage firm or a discount brokerage firm employs a commodity broker. Full-service commodities trading jobs can be lucrative, with commissions and bonuses playing a large role. Commodities investing is inherently risky, and investors pay full-service brokers hefty fees for sophisticated trading advice. Discount brokers offer the same level of service for a lower fee.

Commodity trading entails a significant amount of paperwork. As a result, administrative jobs are a subset of commodities trading jobs. A sales assistant, for example, is responsible for writing trading tickets and entering data into a computer after receiving buy and sell orders from a more senior commodities broker. A new account’s paperwork is also handled assistants.