Physical commodity trading is considered to be a highly stressful occupation. Markets are volatile and we need to deal with a number of counterparties at the same time – a real time, in different time zones. In physical trading – trading and logistics (called very often traffic and/or operations) are inseparably linked. As a trader you cannot just make a deal and let logistics deal with minutiae of a delivery. …
Contracts in commodities trading industry, even if differ in fine print and general terms and conditions attached, tend to be quiet standardized. There are key elements dictated by the nature of the business itself, appearing in majority of contracts and containing certain standard formulations. Those key terms naturally bring the attention of experienced trader, who happen to peruse over the contract. We will focus on them in discussion below. Each …
Usually a negotiation process in commodity trading starts with obtaining of enquiry. Selling is always more difficult than buying, so you start from the sale side. Obviously it does not preclude a situation when you have an access, either due to sheer luck or relationships build to a commodity which is either rare on the market or cheap, or has desirable specification, for which market is very liquid or which …
There are people out there at trading houses, financial institutions and all sorts of media providers called analysts. What they do all day is analyze the market, the data (external and internal) and come up with actionable insights. Hence analysis deserves a dedicated role on its own, and is closely linked to research, which again is something you could do full time. Yet here we will talk about different type …
From a trader’s perspective commodities market comprises of: a) producers b) consumers c) other trading entities d) auxiliary service providers Producers obviously are involved in production of commodities and include as diverse examples as: farm cooperatives, mines, oil fields. When we look at producers, we need to discern the level of processing involved, for the same commodity. To show what I mean by a level of processing, let’s take metals …
