What does a Commodity Broker do?
A Commodity Broker is a firm or individual who executes orders to buy or sell Commodity Contracts on behalf of clients and charges them a commission. A firm or individual who trades for his own account is called a trader. Commodity contracts include futures, options, and similar financial derivatives. Clients who trade commodity contracts are either hedgers using the derivatives markets to manage risk, or speculators who are willing to assume that risk from hedgers in hopes of a profit.
Reader Questions
Is the commodity broker an IB or FCM?
This information is useful in determining whom you are dealing with. An IB (Introducing Broker) must use an FCM (Futures Clearing Merchant) for trade clearing and order execution among other things. If you are considering opening an account with an IB then you should realize that your money will be held by the FCM not the broker you are working with. This is not bad, it means that you should also qualify the FCM.
How Many Years in Business?
The main consideration here is the fact that just like any other new business, the odds of failure are very high in the first five years of operation. Stick with an established firm.
Recommended Resources On Commodity Broker
Futures & Options for Dummies
By Duarte, Joe (Author)
Futures & Options For Dummies will show you how trading is done and how to survive and succeed in these ever-changing markets. Filled with nuts-and-bolts advice, you'll soon discover how to manage the risks involved and reap the rewards of futures and options trading. This straightforward guide gives you the tools you need to understand: Ins and outs of trading futures and options How to analyze the markets and develop strategies Interest-rate futures and speculating with currencies How to stock up on indexes The direction of commodity futures Organizing your financial data and calculating your worth Developing strategies now to avoid pain later The execution of successful trades
Useful Links
http://ezinearticles.com/?Selecting-a-Commodity-Broker&id=580160
http://www.indiancommodity.com/broker.htm
http://www.commoditybrokersindia.com/
http://www.findouter.com/Asia/India/Business_and_Economy/Finance/Commodity_Brokers
http://dir.indiamart.com/impcat/commodity-brokers.html
http://www.sharekhan.com/
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