Hedge Funds Boost Hiring of Commodity Traders Amid Market Volatility

Traders focusing on commodity market volatility are experiencing a surge in demand as geopolitical tensions and trade disputes create unpredictable price shifts. Hedge funds, including Eisler Capital and quantitative trading firms such as Squarepoint Capital, are actively seeking skilled traders capable of navigating these choppy markets, according to industry recruiters and participants.

Recent fluctuations in commodity prices have been driven by a variety of factors, including tariffs imposed by former U.S. President Donald Trump on key trading partners and ongoing conflicts in regions like Israel and Iran. These developments have heightened uncertainty in global markets, especially within the energy sector. As a result, one volatility measure for commodities reached its highest level in July since early 2023, a period marked by the repercussions of Russia’s invasion of Ukraine.

Increased Demand for Volatility Traders

The current market environment has significantly boosted the need for traders and portfolio managers specializing in cross-commodity and volatility strategies compared to the previous year. Ross Gregory, head of global commodities at executive search firm Omerta Group, noted that the demand for talent in this area has surged as volatility trading desks are now yielding tangible returns due to the daily impact of geopolitical events.

In a notable shift, Eisler Capital recently recruited volatility trader Greg Bugaj from Gunvor, while former Gunvor trader Scott Harbert launched his own hedge fund named Crucible Commodities and brought on trader Thompson Ng. Additionally, Anthony Pears, a seasoned metals trader with a decade of experience at merchant Trafigura, joined Squarepoint, and Dimitri Avramov, previously a cross-commodity volatility trader at Bank of America Corp., recently moved to Morgan Stanley.

Shifting Dynamics in Commodity Trading

The hiring trend reflects an evolving landscape where hedge funds and physical trading houses increasingly overlap. Bloomberg previously reported that firms like Balyasny Asset Management and Qube Research & Technologies Ltd. have begun trading physical gas in Europe, with Qube expanding its presence in the United States.

Traders specializing in volatility employ options to predict future price movements based on their magnitude rather than direction. For instance, Bugaj uses a combination of game theory, quantitative analysis, and fundamental insights to exploit pricing anomalies in options markets. The rising demand for quantitative researchers with skills in programming languages such as Python and expertise in machine learning has also been observed in 2023.

Despite these advancements, the trading environment remains challenging. Several leading oil trading desks reported declines in second-quarter profits compared to the previous year, attributing this downturn to geopolitical disruptions and inconsistent U.S. trade policies. As the market continues to react to global events, the focus on volatility trading is likely to grow, highlighting the critical importance of skilled traders in navigating this unpredictable landscape.