Commodity Traders

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Commodity Traders

Commodity traders take a futures trading position for farm produce such as grains or for commodities such as precious metals mined from the earth. They buy and sell commodities for making profits in the trade. They sign futures contract which is an agreement for delivery of a particular commodity at a given time and date for a pre-determined price.

Job Profile

Work for trading firms, brokering firms or independently
Take a position in the market for buying a commodity on the basis of their research and expertise to make profit in the commodity trading
Inspect competing farmers plantations for predicting yields and quality
Ascertain the best plantation in terms of yield and quality
Discuss with trading or broking firm or other buyers their demands in terms of quantity and value
Estimate the predicted selling price and make a bid for buying so that the deal is profitable
Work through commodities exchange or directly with the producer
Specialize in commodities such as wheat, rice, soya bean, etc

Salary/Package

An early career Trader, Commodities with 1-4 years of experience earns an average total compensation Rs. 3 lakhs p.a. A mid-career Trader, Commodities with 5-9 years of experience earns an average total compensation of Rs. 7.7 lakhs p.a. At a senior-career Trader, Commodities with 10+ years of experience earns an average of Rs. 10.8-25.7 lakhs p.a. The salaries may vary based on experience, skills, roles, location, etc.

Skills required

Excellent negotiating skill
Business and market awareness
Good mathematical skill
Research skills
Ability to analyze micro & macro economic data, industry data and about positions taken by market operators
Emotional balance
Business acumen
Communication skill
Risk taking
Understanding of Indian and International commodity market like CBOT & COMEX
Price forecasting of commodity

Pros and Cons of an Entrepreneur

Pros

Higher growth opportunities
Diversification – Diversification is when you invest in a variety of industries that give results differently to changes in the market
Provide security against inflation

Cons

Highly volatile market – Commodities are most volatile security among other assets
Sometimes no income generation
Stressful environment

How do I be one

Path

Std XII (Stream: Any) >> Graduation (BCom/BEco/BTech/BBA) >> Post Graduation

(MBA/International Business) >> Certification (MCCP) >> Goal (Commodity Traders)

The MCX Certified Commodity Professional (MCCP) course is for those who want to participate in the commodity derivatives market. The MCCP certificate is valid for 3 years. The programme covers modalities of trading in commodity markets, trading practices, settlement, clearing and delivery procedures, legal regulation framework. MCCP examination has 50 questions and minimum qualifying score is 50%.

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