eFinancialCareers

The Financial Services Authority is making noises about a shortage of experienced commodities traders.

Headhunters confirm mid-ranking traders are getting harder to find. “The shortage of staff is absolutely more critical than before because there’s been such expansion,” says Colleen Quilty, head of the commodities division at search firm Akamai Financial Markets. “Most of the demand is at the intermediate level, for people with between five and seven years’ experience.”

Commodities divisions were among the most profitable for banks last year, and with commodity derivatives volumes also soaring, banks have not been slow to throw themselves at the market. Bank of America, Lehman Brothers and Credit Suisse are among this year’s big hirers, while more-established players such as JPMorgan are also said to be interested in adding to teams.

Jakob Bloch, managing director of headhunter Commodity Appointments, agrees mid-ranking commodity traders are the most highly sought after. He says a mid-level oil derivatives trader can expect to command between £85k and £120k as a basic salary, plus a bonus typically ranging from 30% to 300%.

In an effort to lure these rare mid-level specimens, banks are said to be offering sign-on bonuses of between 10% and 50% of total compensation. However, two-year guarantees are said to remain relatively rare at this level.

In a report out earlier this week, the Financial Services Authority said banks’ commodities departments were ‘overstretched’. It pointed to Amaranth, the hedge fund which lost US$6bn in natural gas trading last year, as evidence of what can happen when commodities trades go a bit wrong.