Metals Traders Are Drawing In the Big Bucks

The debate over trader pay continues, this time as word comes of exorbitant salaries for metals traders. It's basic supply and demand: The universe of metals traders is relatively small, but the interest in the sector is growing.

Steven Fleming, president of search firm Wall Street Options, says cutbacks in prop trading have hit commodities desks hard. "Now they're beginning to play catch up," he says. Pay is purely for performance, he adds, and for now market activity means good times. Clawback provisions are typical, and vesting generally happens in three to five years.

Flight to Safety

Much of the interest is also being driven by the rise in value of base metals and the flight to safety through gold and silver. Spots for base metal traffic analysts, traders, and sell-side research analysts are appearing. But where the few trading spots available in other sectors are primarily for senior folks, metals groups are looking to add junior people. Associates should have about two years in investment banking or financial analysis, a strong MBA background and a thick skin to deal with senior traders.

Broker-dealer Newedge is ramping up its metals operations, adding people in New York and London. The company is connecting customers to the Shanghai Futures Exchange, one of the largest base metals price-setters on the globe. Meanwhile, R.J. O'Brien & Associates announced the expansion of its global metals division.

Nomura's been boosting its Asian commodities division for some time. Jobs are also being added at niche brokers and big investment banks in Singapore, Hong Kong and London - all looking for brokers, derivatives traders, risk managers, and quants. Hiring is especially swift in Asia.