Commodity trading deals with the investment in areas like metals, crude oil, energy resources, gold, silver or agro based products like soya bean, sugar, cotton, and wheat, etc. Such types of trades are not necessarily involved in actual use or delivery of the asset they buy. Instead, they make contracts and take positions on commodities with the expectation that the market will change in response to the economic change and other trends allowing them to make profits by buying or selling the contracts.
To build a career in this field of the financial market, the employers expect the Candidate to have a bachelor or postgraduate degree in finance, economics, accounting or business administration.
Commodity traders are normally employed by trading firms and banks. On salary and commission basis. The salary of the commodity traders varies on his work location, position within the firm and his past experiences. As per the report of “HC Insider” in 2013, a commodity trader with less than three years experience is expected to earn an average basic annual salary equivalent to USD 1,00000 to USD 50,000 -. While those with the experience of 5 years or more can have an average base salary between USD 2,00000 to USD 3,50,000.
While commodity trading companies offer an opportunity for employment to commodity traders, they provide lower salary base levels as compared to Banks and other financial institutions. Most of the banks and financial institutions offer linked compensation due to forms regulations. On the other hand trading companies offer performance-linked bonuses and provide a better opportunity to earn higher compensation.
According to some statistics, as provided by labor dept. Employment opportunity in the field of commodity and securities trading and other financial services agencies will grow at a rate of 15% between 2010 and 2020. The growing number of investors, switching from stocks to commodities will lead to the employment of more commodity traders to need market demand.
There are also some regional factors which might influence the employment prospects of professional in the sector of financial services. These factors relax to the availability of good institutions providing education in this field, high economic activities zones and industrial zones, etc.
There is another segment of professionals in this field. They are swing trades. They make short term and medium term trader for their client that varies from several days to Six months. This type of trading fall between the long term “buy and hold” investing and day trading, where traders hold stocks more than a day. Swing traders monitor the magnitude of price swings in the stock market and buy and sell stocks to earn high returns for their clients they serve and where they live.
It is also found that commodities traders working in the field of metal and mineral merchants and wholesalers. Have higher earnings as compared to those engaged in agro-based sectors.