Full and Discount Commodities Broker
Commodities broker is usually a firm or an individual, on behalf of clients for a commission charge has a duty to execute orders for sale and purchase ofcommodity contracts. Clients of the firm could be speculators, institutional investor and individual.
Commodities broker term can be elaborated as follows:
• First is Introducing Broker: Introducing broker is generally a firm that getting orders from customers to execute commodity contracts on commodities trading and does not hold the customers' funds to margin.
• The second is Floor Broker: Floor broker trades commodity contracts such as future, options and its derivative instruments on the commodity exchange floor on behalf of the clients.
• The third is Futures Commission Merchant: Futures Commission Merchant is similar to an Intoducing Broker. They accept orders to run the commodities broker contracts to trade on commodities trading exchange and holding customer funds to margin.
• The fourth is Commodity Pool Operator: A commodity Pool Operator act base on instruction of Commodity Trading Advisor and operate commodity pool that is similar to a mutual fund.
.• The fifth is Commodity Trading Advisor: This firm is not only providing advice to the investors to trade in commodities broker trading, but also holding power of attorney to trade in commodities trading on behalf of its client.
Services are offered by commodities broker:
Commodities Broker generally offer full service brokerage and discount brokerage to its client to trade.
Choosing investments, presenting market data to enable us to better analyze, providing advice on the latest options investments and making appropriatedecision are guided by a full service brokerage firm. So if we are the new one on futures trading and wish to deal with several markets, full service brokerage firm is valuable even though they will charge higher to their clients.
A Discount Commodities Broker is a broker limited their service of our commodities trading by executing our order only. So detail of market data, investment avenues and other all decisions related to the futures trading has to be done by ourselves.
In this case the Discount Commodities Broker charges are low, because of their limited of services. This firm is also beneficial if we have already experienced and have a lot of knowledge in commodities broker trading.