Commodity Trader Jobs

By: EconomyWatch   Date: 1 October 2009

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EconomyWatch

The core Content Team our economy, industry, investing and personal finance reference articles.

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If you possess sound selling skills and are interested in trading commodities, the best option is to become a commodities broker. Many investors these days opt for the online purchase of stocks and mutual funds, which is convenient. On the other hand, trading commodities requires the use of sound strategies, such as range trading strategy, trading breakouts and fundamental trading strategy. This compels investors to seek help from commodity brokerage firms. Moreover, commodity trader jobs are more specialized than those of registered securities representative or stock broker careers.

Commodity Trader Jobs: Procedure For Becoming a Registered Commodity Broker

It is mandatory to be registered to become a certified commodities broker. You may also have to go through certain tests to be able to apply for a license. Applicants must have in-depth knowledge of futures, options, futures contracts, orders and other products that can be traded.

 

For instance, in the US, every commodities broker is required to obtain a license from the National Futures Association (NFA). To get a commodity trader job, you will also be required to clear the Series 3 exam as per the US regulations.

Commodity Trader Jobs: Options

Some commodity brokers opt for working in their independent offices. However, most of them gain practical experience by working with stock brokerage firms. Before you join a stock brokerage firm, ensure that it specializes in commodities, as some of them may deal only in stocks and options.

 

You can also choose to work with a futures contract market (FCM) where you will be soliciting and accepting orders of commodities for future delivery. There are a number of FCMs in New York and Chicago.

 

Commodity Trader Jobs: What does it involve?

The job of a commodity broker entails:

  • Creating a commodity trading plan

  • Keeping trading records

  • Controlling trading risk

  • Staying abreast of market changes

  • Opening accounts and building business books for the sales you make

 

If you possess strong analytical skills, you can apply in the research department of a commodity brokerage firm. Your job will be to make trade recommendations after performing a lot of technical analysis. This is done by conducting a thorough research in the commodity market.

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Commodity Trader Jobs: Commission

The rate of commission of a commodity broker has reduced considerably owing to the increasing use of online trading. During the 1990s, an average commodity broker used to earn more than $150 per round-turn. However, in 2005 the full-services rate spanned between $30 and $80.

 


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