A career as a commodity trader might be a good choice for someone with at least a bachelor's degree in economics or finance who wants to analyze and capitalize on stock market trends. Registering with a regulatory body, passing an exam, and maintaining licensure are all key requirements to practice as a commodity trader. Job growth in this field should be faster than average for the coming decade.
Commodity traders buy and sell customer orders through the trading department of a firm and may also provide investment advising. While there are no standard degree requirements for the position, a bachelor's degree at minimum is usually recommended, with master's and doctorate degrees seen often in the field. Commodity traders also need to become licensed through the Financial Industry Regulatory Authority (FINRA).
|Required Education||Bachelor's degree (recommended)|
|Projected Job Growth (2014-2024)||10%* (all securities, commodities, and financial services agents)|
|Median Salary (2015)||$71,550* (all securities, commodities, and financial services agents)|
Source: *U.S. Bureau of Labor Statistics
Commodities Trader Duties
Commodities brokers must typically keep a keen eye on the market in relation to product and investment pricing, trends and demand. Some traders receive purchase and selling instructions, meeting with other commodities traders to negotiate transactions. Others may take client orders over the phone, performing deals via computer to a firm's trading department or directly on the floor of a stock exchange. Additionally, commodities traders provide financial advice, often meeting with clients to plan, review or update an investment portfolio.
According to the U.S. Bureau of Labor Statistics (BLS), the employment of securities, commodities and financial services sales agents is predicted to increase by 10% between 2014 and 2024, which is faster than average compared to all occupations. In May of 2015, the BLS estimated that these financial professionals received a median yearly salary of $71,550.
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Requirements of a Commodities Broker
Academic requirements of commodities and securities traders are based solely on industry standards and individual employer requirements. Typically, a minimum of a bachelor's degree is recommended, though master's and doctorate degree-holders are not uncommon. Applicable fields of study at both the undergraduate and graduate levels include economics or finance, though programs emphasizing agriculture, banking and other social sciences may offer a strong background in specific commodities trading. Students may receive practical experience via internship opportunities at brokerage houses and investment firms through a school's relevant degree program.
Licensure and Registration Requirements
According to the Financial Industry Regulatory Authority (FINRA), registration with the organization is required to give advice, buy, sell or exchange commodities. While there are no prerequisites, applicants must be sponsored by a brokerage or investment firm. FINRA offers several levels of licensing dependent on the type of trading and the services provided by the trader. Exhaustive testing is required for each type of transaction.
Per the Commodity Exchange Act, aspiring commodities traders must take the National Commodity Futures (Series 3) examination and register with the National Futures Association (NFA). Additional examinations and registration may be required for traders participating in currency exchange, investment advising or solicitation. Those responsible for management of commodities and futures traders are also subject to further testing.
Continuing Education Requirements
To maintain a FINRA license, commodities traders must participate in continuing education programs offered by the organization. Classes may be provided through universities, regional and Internet-based workshops and training events, conferences and online learning. A minimum of 12 continuing education hours must be completed every three years. Registration through the NFA does not require continuing education, though traders must keep updated records.
In summary, a commodity trader works with clients to buy and sell products based on market trends, as well as to provide investment advice. A bachelor's degree is sometimes sufficient to begin a career in this field, although master's and doctoral-level degrees are common as well. In order to practice, you must be registered with both FINRA and the NFA, and maintain licensure through continuing education classes.