CommodityPlaybook
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Commodity trading, explained properly

Learn how the desk actually works

Not theory, and not a textbook. How cargoes move, how money is made, and what every seat on a trading desk is really doing.

Read chapter one freeSee what suits you

No account needed to start.

PRICEspotM+1M+2M+3M+4Contangostorage pays

From chapter five. The curve is the market telling you what it believes about storage.

17

chapters

36

glossary terms

25

anonymous mentors

2

tracks

The core idea

Three margins, and everything else is detail

A commodity trading house does not make money by predicting prices. It makes money by moving goods from where they are worth less to where they are worth more, and by surviving everything that can go wrong in between.

Once you can place a conversation into that frame, most of the jargon stops being intimidating.

LocationWorth less here,more there+TimeWorth less now,more later+FormWorth less raw,more refinedWHERE THE MONEY COMES FROMEverything on a desk exists to capture one of these,or to stop something destroying it.

From chapter two

A cargo is a contract, not a price

Delivery window, quality spec, inspection regime, payment mechanism. Get any one wrong and it costs more than the margin on the deal.

1Load portinspection, B/L2At sealay-can, demurrage3Dischargeinspection, LOI4Paymentletter of creditrisk passes here (FOB)Seller’s problemBuyer’s problem

Two reasons to learn this

Same industry, different purpose. Pick one and the playbook shows you what is relevant.

For people selling into trading firms

Your buyers are four different people

A trader is measured on P&L and has no time. Operations knows exactly where things break and has no budget. Risk is structurally cautious about anything new. Finance owns the constraint nobody mentions.

Start the Sales track
FOUR DIFFERENT BUYERSTraderjudged on P&Lhas no timeOperationsjudged on cargoes movinghas no budgetRiskjudged on nothing failingsays no by defaultFinanceowns the facilityowns the real limitPitching all four the same way is the mistake.

From chapter one

“A cargo of crude in West Africa is worth less than the same crude delivered to a refinery on the US Gulf Coast. That gap, minus the cost of moving it, is the location margin.”

Every desk, every job title and every piece of software in this industry exists to capture one of those three margins or to stop something from destroying it.

Read the full chapter
The chapter on trade finance explained in twenty minutes what took me two years on the desk to work out for myself.
Operations · Global energy trader
I sell software to trading firms. This is the first thing I have read that describes what my buyers actually do all day.
Head of Sales · ETRM vendor
I sent it to two graduates on my team and stopped having to explain basis every week.
Crude trader · Ex-supermajor

Read the first chapter, then decide

Free gets you chapter one and the whole glossary. Membership opens the rest of the playbook, the knowledge tests and the career tools.

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