Whether you’re planning to open a self-directed futures account, or one where a broker supports the trading of your account – in some large or small way – there are several important factors you should consider when you decide to open an account and start trading. Everything a brokerage firm offers – or doesn’t offer – comes at price. Typically that price is boiled down and quoted in terms of what’s charged when you make a trade – commissions and exchange fees – and maybe a short list of other costs. But choosing a futures broker by simply comparing the “bottom line” of commissions can be hazardous to your trading.
Benjamin Graham, an influential economist and professional investor, is credited with saying, “Price is what you pay; value is what you get.” Because the dollars and cents a brokerage firm charges typically provides for a wider range of services – beyond just trade execution – it’s important you know what those services include, and if they’re important to you or not.
Whether you decide to utilize a discount futures broker or perhaps a full service commodity trading broker, the content below should help you create a guide and understanding to choosing the right futures trading broker for your trading needs and style.