Using Commodities Brokers

2007-03-08 10:33:40

( Business )



A commodities trader works on the futures exchange, trading their own accounts, while commodities brokers work for a firm that trades on the exchange on behalf of their clients.

Commodities are markets that deal with gold, silver, soybeans, corn, wheat, lumber and many others. Big firms use commodity trading to fix their selling prices before deliveries are made.

Good commodities brokers assist you in determining how to price a certain commodity. They provide you with information on the fair market value of commodities and can provide you with guidance on where to profit. Commodities brokers are actively involved in the exchange and can provide you information on the market’s activity daily.

Trading of commodities is not for everyone. The prices of this type of trading can go up and down rapidly and as a result, a lot of people in turn gain or loose money far quicker than when one trades on the stock exchange.

If one is interested in commodities trading, they should appoint a commodities broker and open an account through a licensed commodities broker.

Do note that in selecting commodities brokers, there are several types of brokerage firms that one can choose from.

A service the provides full brokerage can assist you if you are actively trading several markets at a time. The brokerage is helpful to those who are new to commodities trading and can provide you with information on the active commodities. Their transaction fees are higher as they provide you with a full service; they are also in close contact with you for trading advice.

A broker providing discount commodity brokerage services leaves you the leeway to choose commodities or futures to trade. A client simply calls them to inform them of their order and their job is to execute the trade.

Another type of broker specializes in futures trading and courses their commodity exchanges through an established company. They commonly operate in smaller cities.

If you already a have a list of potential brokers, it is best that you arrange for an appointment to see them. You should find out how much they know about trading commodities, the minimum account size they accept, their track record, the services they offer and the commission fees they charge.

You may use the Internet to search for online brokers, if you have not yet found one who can provide you with the proper assistance and service.


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