Stepping into the world of commodity trading can be daunting. However, if regulations and licensing protocols are followed, there won’t be any problems. After getting the necessary degrees and experience needed to trade commodities, getting the right certification and license to trade commodities is important. This includes registering with the Financial Conduct Authority to get license approval and getting certification through a Chartered Financial Analyst.
What are Commodities?
Commodities are agricultural products that are mined, grown, reared or processed and natural resources. ‘Soft’ commodities are reared or grown, such as wheat, cotton, meat, and coffee, whereas ‘hard’ commodities are extracted or mined like coal, metals, oil and gas.
The price of commodities varies according to supply and demand. For example, the increased demand for electric cars has increased the price of lithium which is a key component in batteries.
What is Commodity Trading?
It is the process of buying, storing, transforming, or selling physical commodities, as well as managing assets. Various commodities are being traded, including agricultural products, oil, gas, metals and timber.
What Does a Commodity Trader Do?
A commodity trader is someone who assists clients buy and sell raw goods or commodities. Commodity traders have a variety of skills, including sales and financial knowledge. They use the commodity trade process to trade assets for profit.
What Licenses and Certifications Do I Need For Commodity Trading?
Getting certification and a license to trade commodities is extremely important. Register with the Financial Conduct Authority (FCA) to get a licence of approval. Apart from earning a degree, the FCA may require individuals to gain additional certifications like the Chartered Financial Analyst (CFA) or to complete the Chartered Institute for Security and Investment (CISI) exams.
The main reason for these requirements is to ensure everyone stepping into the world of commodity trading has sufficient knowledge of the regulations and financial markets.
Are There Any Education and Training Requirements For Commodity Trading?
Even though there are no formal educational requirements for commodity training, there are certain qualifications and education individuals can get to increase their knowledge and experience in the commodity training sector. This includes.
High School Diploma
A high school diploma and a college degree are strongly recommended. When stepping into the world of commodity trading, brokers need a variety of knowledge covering areas like economics, world politics, and sometimes even weather. This knowledge will help determine the demand for each commodity, making it a bit easier to predict their prices.
Interested individuals can start their career in commodity trading in high school to broaden their knowledge by taking classes like history, maths, science, and business. Take English to gain an advantage since it enhances communication skills which will enhance client relationships and sales as a broker.
College Degree
The majority of commodity traders have a college degree. However, there is no “commodities broker major,” but individuals can still improve their chances of obtaining a job in the commodity trading sector by studying economics, accounting, finance, or business administration while in college.
Also, continue to develop an understanding of politics and technologies. This can be easily done by taking government and computer classes. Some brokers also go on to earn a master’s degree in business administration.
How Can I Gain Experience in Commodity Trading?
To increase the chances of getting a job in commodity trading, gaining experience is key. There are two ways individuals can gain the needed experience. This includes:
Internships
Certain commodity trading firms offer trainee programs and internships to provide hands-on experience in trading, risk management, and other important areas. These programs or internships usually last a few months and are designed to give interested individuals an understanding of how commodity trading works.
During these programs and internships, individuals learn about trading, commodity markets, and risk management. They also get the chance to work on real trading projects, which helps them develop practical skills valued in commodity trading firms.
Online Courses
Online courses are another way to get experience in commodity trading. There are many online platforms that offer courses and certifications in commodity trading, which cover topics such as market analysis and trading strategies. By taking online courses and getting certifications, individuals can demonstrate their knowledge of commodity trading. This can be particularly helpful for those who don’t have any prior experience in the field. Overall, gaining relevant experience is crucial for anyone looking to find a job in a commodity trading firm and internships and online courses are one of the best ways to get it.
Get Into the World of Commodity Trading
After gaining the relevant education and experience for a commodity trading job it’s important to register with the Financial Conduct Authority (FCA) to get a licence of approval. Apart from earning a degree, the FCA may require individuals to gain additional certifications like the Chartered Financial Analyst (CFA) or to complete the Chartered Institute for Security and Investment (CISI) exams.