Meet The Trading Broker

Commodity Trading Broker

Here’s a surprising little fact: commodity trading brokers have been around since ancient times.

Back then the so-called historical commodity trading brokers traded livestock and grain futures contracts. More than a century later, commodity brokers are still here. This time they’re back with a vengeance, trading all sorts of derivatives based on food, energy, metals, equities, stock indexes, bonds, currencies, etc.

First of all, technically speaking, what is a commodity trading broker?

A commodity trading broker is an individual who executes buy and sell orders of commodity contracts on behalf of investors or clients. Commodity trading brokers work by commission. But there are also commodity trading brokers who trade for his or her own account, called traders.

It should be noted that the term commodity trading broker also refers to a firm specializing in the commodity trading market.

Individuals and firms collectively known as commodity trading brokers include Introducing Broker (IB), Commodity Pool Operator (CPO), Commodity Trading Advisor (CTA), Floor Broker, and Associated Person (AP)

Commodity trading brokers are licensed professionals. In the US, the National Futures Association (NFA) provides the license for the profession. A commodity trading broker, if he or she wants to, may also seek to be registered under the Commodity Futures Trading Commission (CFTC).


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