About Commodities Futures Brokers
Commodities brokers can come into the business from many different backgrounds.
Maybe some started out at lower levels. Some have totally unrelated backgrounds, and
are simply out for a way to make more money.
The only requirement is to pass the Series 3 exam administered by FINRA and written
by the National Futures Association (NFA).
You can research possible choices at NFA.Futures.org. The NFA is a regulatory body of
the futures and options industry offering investors free access to background information
on brokers and brokerage firms.
You can access their (Background Affiliation Status Information Center) BASIC
database. This contains their Commodity Futures Trading Commission (CFTC)
registration and NFA membership information. It also includes how long they've been a
registered member of regulatory bodies and a lit of any regulatory actions. This can
include NFA arbitration awards and CFTC reparation cases.
Such cases do not mean that the broker is guilty of wrongdoing. Remember that some
people are unreasonable. These claims remain on their record whether it's been settled,
dismissed or withdrawn.
If you see anything disturbing, ask the broker for their side of the story.
You may expect for a futures or option broker to also be a trader, and this can be true.
However, sometimes it's not. After all, bankers can be good at loans to start businesses
without being entrepreneurial themselves.
Many brokers are forbidden to trade accounts in their own name, or for friends or
family, because it can be seen as a possible conflict of interest.
If they do trade, their orders are filled behind those of customers, so they have a time
Furthermore, it's simply a lot easier to be objective about the markets if you are not
personally involved with money. Not trading themselves may make it easier for them to
You can choose between a full service broker or a deep discount online broker.
If you're experienced and don't need any help handling your tra