{"id":13438,"date":"2017-10-30T06:28:42","date_gmt":"2017-10-30T14:28:42","guid":{"rendered":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/?p=13438"},"modified":"2017-10-30T21:51:30","modified_gmt":"2017-10-31T05:51:30","slug":"commodity-broker-types-commodity-brokers","status":"publish","type":"post","link":"https:\/\/www.cannontrading.com\/tools\/support-resistance-levels\/commodity-broker-types-commodity-brokers\/","title":{"rendered":"What is a Commodity Broker and Types of Commodity Brokers"},"content":{"rendered":"

\u201cIf you buy at the right time, you can make a mountain of money in commodities,\u201d says financial magazine Forbes<\/em><\/a>. ( and here at Cannon we would also like to remind you of the same possible large risk when you buy or sell at the wrong time\u2026.) Commodities don\u2019t usually move at the same pace as the stock market, continues Forbes,<\/em> so they can diversify your investment portfolio and lower the risk factor.<\/p>\n

You need a commodity futures & options broker to facilitate your commodities trading. Commodities brokers<\/a> buy or sell commodity contracts for a commission, and commission rates are usually paid per contract. A completed buy-and-sell transaction in the commodities market is called a round-turn.<\/em><\/p>\n

Commodities futures brokers\u2019 clients can be hedgers<\/em> (people who use derivatives contracts to manage risk) or speculators<\/em> (those who take a risk in hopes of greater profit). If you handle your own account, you are known as a self directed trader.<\/em><\/p>\n

Your commodity futures broker will provide you with trading software, training, and ongoing education about trading futures as well as different strategies you can use. A savvy broker firm offers current market reports and economic calendars<\/a> to help with your trading decision-making.<\/p>\n

Types of Commodity Brokers<\/strong><\/p>\n

In the U.S. there are Intermediary Brokers known as FCM\u2019s (Futures Commission Merchants) and IB\u2019s (Introducing Brokers).<\/p>\n

These intermediaries are registered with the CFTC (U.S. Commodity Futures Trading<\/a> Commission) in addition to being members of the NFA (National Futures Association)<\/p>\n

An Individual Account Executive must be registered with the NFA after passing the series 3 examinations.<\/p>\n

Account executives can work with FCM\u2019s , IB\u2019s, CTA\u2019s, CPO\u2019s.<\/p>\n

A commodities futures trading company includes one or more of these types of brokers<\/a>:<\/p>\n