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Online Commodity Brokers - Researching and Selecting Online Commodity Brokers

trading brokerage commodities account

With the long running bull market in commodities still raging along in full force, many of today’s investors, frustrated with lackluster stock market trends and lack of consistent performance, have decided that they need to get involved with commodities trading. To do so, they will have to open a commodity brokerage account, since such trades can not be placed by traditional stock brokers or through online stock trading accounts. These days, the convenience and affordable commissions which are the hallmarks of online commodity brokers have made them the preferred choice for many people who are already involved with commodities trading. Researching and selecting online commodity brokers can be done fairly easily, with a little time and dedication on the part of the person concerned.

There are a variety of features which should be sought out and researched in the search for online commodity brokers. It is helpful to find a commodity broker which offers some version of training materials. These prove to be useful in getting the new commodity trader started with the strategies involved in trading commodities. It is also useful to have charting facilities as a part of the commodity broker platform, on top of this. Any investor who is comfortable in trading using charting trends will find this feature essential, and not just helpful.

Commodity brokerage trading platforms will be one of two differing types. The first type is one which is run over the Internet. The customer simply logs in using his name and password credentials to begin accessing his or her account and trading commodities in it. The other variant is a platform which comprises of software that must be downloaded and then run from the person’s desk top or laptop computer. This second form is considered to be more secure, since only a person using that particular computer is able to access the individual’s commodity account.

The online commodity brokers’ fees and commission schedules should also be thoroughly investigated and compared as part of this research and selection process. There are many full service commodity brokerage firms who have an online presence and trading platform. While they are often well known, giant, reputable outfits, they also charge a substantial set of fees and commissions. This is because they provide a variety of helpful advice and recommended trading strategies, as well as offering to work closely with their clients to protect them from being blown up in a single trade. Online commodity brokers, alternatively, typically offer a fifteen day or so trial period when the prospective client is capable of fully participating and engaging in real time futures trading, without committing to the firm or putting real money on the line. In such a way, the commodities trader is able to build up some actual exposure to and experience in the means and methods that the futures really trade on the commodities market. The third type of online commodity brokers are those which turn out to be broker assisted commodity accounts. In these hybrid models, the brokerage firms prove to be a cross between the discount online commodity brokerage and the full service commodity brokerage firms. Finally, the fourth type of online commodity broker to research and contemplate using is a managed account commodity brokerage. With this type of brokerage account, the person authorizes their broker to make trades on the individual’s behalf, without needing to consult with him or her first.

Fees typically charged by online commodity brokers run the gamut. They can be in the neighborhood of $3 for each side (in and out) of an E-mini contract, and around $6 for a single floor trade. Naturally, firms with higher fees may offer more varieties of and conveniences in service. Options and elements which the online commodity broker should provide to the prospective commodity trading client should include the ability to trade either by email, by phone, or by a cutting edged trading platform which rapidly routes the person’s order directly to the filling broker agent down in the trading pits. They also should offer current futures markets’ research and capable trading tools on their platform. Customer service, whether by live chat, email, or phone, or preferably all three means together, should be included with the account. Even discount online commodity brokerage firms should be willing to discuss and to help execute a commodity trading strategy and plan.

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