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Commodities Trader


Description

Commodities traders buy and sell stocks, bonds, commodity futures, foreign currencies and other securities at stock exchanges on behalf of investment dealers. They are involved in the blood, sweat and tears of the trading industry and stock market. They act as the link between stock brokers and certain securities not traded on an exchange. This includes bonds and over-the-counter stocks. Therefore, traders sell those commodities to brokers and then the brokers resell the securities to their customers at a profit.

Traders are hired by a financial firm with a clear goal in mind: to make them money. They do this by buying and selling stocks, shares and bonds. As long as traders are profitable, then a company will be happy. Commodities traders make trades for clients, usually at a small fee. In addition, they also provide many other related services to their customers. For instance, they may offer financial advice on the purchase of particular commodities, explain tricky stock market terms and legal trading practices and even help design an individual client's financial portfolio.

Since all people have individual investment goals, commodities traders must give information based on client's personal needs. Traders can also supply price quotes on any security and give information about different companies to invest in. Some commodities traders specialize in institutional investing instead of personal trading. In this type of corporate investing, traders are often hired to focus on a specific financial product, such as stocks, bonds or annuities.

Traders must be updated daily on market fluctuations and changes, due to the volatility of the market. Traders also have to be aware of current events as world affairs hugely impact the value of our currency. One minute a certain stock may be soaring while a hour later, it could plummet into the ground. This risk element is a big part of the profession and traders are aware that their predictions may sometimes be a flop. They often gamble with purchases, but there is usually a educated reason behind buying a security. Nevertheless, there is a huge element of stress involved in being a trader, including sleepless nights. The trader's earnings mirror the swinging pendulum effect of the market.

In light of the stress levels, some traders can be entitled to approximately one-month's vacation each year. In fact, some firm's have commission contests amongst their traders for all-expenses paid vacations. This acts as a huge incentive to work hard. Commodities traders need to take vacations to ease their tension and refresh their energy levels.
 
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Grand Canyon University
Since 1949, Grand Canyon University has been a premier private university in Arizona, helping students find their purpose and achieve their potential.
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  Interests and Skills  
A commodities trader needs to have superior skill in interpreting, analyzing and researching information. They thrive on risks and competition and excel in sales. Good listening and communication skills also make a great trader. A large part of the job deals with communicating with clients, in person and on the phone, and making new contacts. Therefore, traders must respect client confidentiality and be culturally and emotionally sensitive. Commodities traders have the ability to understand complicated financial systems, keep up-to-date on financial matters and consider new approaches to problem solving. They must be confident in their financial knowledge and consulting as well as enjoy taking a methodical yet creative approach to research. Finally, commodities traders must be able to multi-task; for example, talk on the phone, access the computer and trade all at the same time.

Traders must be able to deal with rejection and handle an increasingly stressful working environment. They can assess a hectic situation, take a deep breath and thrive on the pressure of any situation. Finally, they love working with numbers and are experts in the stock market.
 

  Typical Tasks  
  • Buy and sell stocks, bonds, commodity futures, foreign currencies and other securities at stock exchanges on behalf of investment dealers
  • Develop trading strategies by reviewing investment information and monitoring market conditions from exchange floor and through contact with trading departments of other investment firms, pension fund managers and financial analysts
  • Make bids and offers to buy and sell securities and complete details of sales on exchange trade tickets.
  • May work on the floor of a securties exchange
  • Most commodities traders work in offices under fairly stressful conditions. Some traders work in large open office space called trading rooms which host open cubicle style desks, row after row. They have access to computers that are online, continually providing them with information on the prices of securities. When there are sudden or unanticipated changes in the economy, which may affect the accounts of many clients, the pace can become very hectic. Entry-level traders seeking to broaden their client base and learn about the firm may work longer hours. A growing number of traders work in call center or online offices which often operate twenty four hours a day, requiring agents to perform shift work. Some traders working on the West Coast start their work day around four a.m. to be in line with Eastern Standard Time. The days are often over 10 hours.

  Workplaces, Employers and Industries  
  • Commodities traders are employed by private financial institutions. Some are employed by smaller financial planning businesses, few are self-employed, while others are employed on a full-time basis or contract their services to larger firms and organizations such as investment companies, stock brokerage firms, stock and commodity exchanges and other establishments in the securities industry.

  Long Term Career Potential  
There are many possibilities of advancement as a commodities trader. The more clients a trader has, the bigger the accounts a trader will take on. Some traders become portfolio managers, branch managers or move into more supervisory roles. A few many even advance to top management positions or become firm partners. All of these advancements make stress levels more bearable. Another path is to become a bond dealer. Traders could work in any job that requires performance in high pressure environments.

Because maturity and the ability to work independently are important in any job, many employers prefer to hire those who have already achieved success in other jobs. Some financial firms prefer candidates with sales experience, particularly those who have worked on commission in areas such as real estate or insurance. Therefore, most entrants to this occupation transfer from other jobs.
 

  Educational Paths  
Commodities traders require a college or university degree with a concentration in finance or business-related coursework. Courses in computers and information technology are also important in the commodities trading field. Many traders have a Master's of Business Administration (MBA), which has given them more insight into the financial world.

New commodities traders often spend their first couple of years developing a client base. This takes a lot of hard work, determination in the face of rejection, and persistence. It is often best to have experience in sales before getting started as a commodities trader.
 

Sources:
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2014-15 Edition, http://www.bls.gov/ooh/
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Employment Statistics, 2002, http://www.bls.gov/oes/2002/oes_nat.htm

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