Commodity Futures Trading Education and Training
Commodities futures trading is the buying and selling of futures contracts on a regulated financial exchange. A futures contract is a contract that entitles the bearer to the receipt of a certain amount of a fungible good, such as oil or gold, at a set location on a certain date in the future. To become a successful commodities trader, individuals must undergo extensive academic education and professional training.
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College
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Although it is not an absolute necessity that a commodities trader receive a college education, according to the Bureau of Labor Statistics, the vast majority do. While in school, most prospective traders take classes and select a major with direct application to their chosen. Common majors include finance, business and economics. While some traders may go on to receive their MBA, particularly if they plan to start their own trading firm, this is not a requirement.
Internships
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While in college, many students who wish to become traders take internships with firms that trade commodities to gain valuable training in the business. While ideally a student will receive an internship with an investment bank or trading house that keeps a commodities trading desk, he may wish to work for a company that produces commodities. For example, a student wishing to trade energy futures might try and intern for an oil or natural gas company.
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Employment
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After school, the prospective trader will seek out a first job, usually at a company similar to those with whom she interned. In lieu of beginning her professional career on the trading desk, she may wish to take a related position in which she can gain insight into how the commodities market functions. For example, she might work as a financial analyst, which will allow her to research commodities markets.
Series 3 License
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Some traders are not licensed brokers, meaning they must place all their orders through an outside broker to whom they typically pay a commission. However, many traders choose to receive a brokerage license, particularly if they are trading on behalf of others, in which case it is a requirement. To do this, the traders must study for and pass the Series 3 exam. To take the exam, traders must be sponsored by their current employer.
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