Archive for August 6th, 2012
Becoming a futures broker requires you to pass the Series 3 exam as well as the background check. You must also be registered with the NFA, the body that governs the industry. However, you must carefully think about why you want to be one. Remember that being a futures broker does not instantly mean earning lots of money. Only those who are good at it will actually earn a fortune from this career.
You must already know by now that futures brokers invest in the futures market by using a risk capital, and it is similar to investing in the stock market. The difference is that you are trading based on predictions of the future commodity price increases and decreases. These commodities pertain to oil, salt, pork, wheat, and other standard set of goods. Your role would to study and research about the commodity market to understand the demand and supply for commodities as well as the factors that affect them. You will place a specific amount in a position indicating the value the commodity will have within a given period. If your prediction is correct, the position is sold for a profit but if not, you’d lose your money.
Basically, being a futures broker involves more risks than being a stock broker because there are a lot of things and circumstances that can affect the value of commodities. Needless to say, you’d really need special skills to succeed as a futures broker.