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183:, and an ever growing list of other underlying assets. Ever since the 1980s, the majority of commodity contracts traded are financial derivatives with financial underlying assets such as stock indexes and currencies. Post the implementation of the Volcker rule in 2014, the number of commodity trading houses and individual brokers have dwindled.
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accounts. Like an IB, a CTA does not hold customer funds to margin; they are held at a FCM. CTAs exercise discretion over their clients' accounts, meaning that they have power of attorney to trade the clients account on his behalf according to the client's trading objectives. A CTA is generally
209:. When executing trades on behalf of a client in exchange for a commission he is acting in the role of a broker. When trading on behalf of his own account, or for the account of his employer, he is acting in the role of a trader.
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Historically, commodity brokers traded grain and livestock futures contracts. Today, commodity brokers trade a wide variety of financial derivatives based on not only grain and livestock, but also derivatives based on foods/softs,
217:. A floor broker is different from a "floor trader". The floor trader also works on the floor of the exchange but makes trades as a principal for his or her own account or for the floor trader's firm.
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an employee, partner or officer of a FCM, IB, CTA, or CPO, duly registered and licensed to conduct the activities of a FCM, IB, CTA, or CPO. This is the commodity equivalent to a
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303:(NFA). Floor brokers/traders who are members or employees of a commodity exchange generally do not need to be members of the NFA, as they are regulated by the exchange.
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Commodity brokers can trade commodities on various exchanges, which specialize in trading a certain commodity type. The common commodity exchanges include the
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a firm or individual that solicits or accepts orders for commodity contracts traded on an exchange. IBs do not actually hold customer funds to margin.
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In the United States, an individual working in any of the above roles must pass the Series 3 National
Commodity Futures Examination administered by the
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a firm or individual that operates commodity pools advised by a CTA. A commodity pool is essentially the commodity equivalent to a mutual fund.
295:(FINRA). With few exceptions, most individuals who act as a FCM, IB, CTA, and CPO, as well as their RCR/APs, are required to register with the
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a firm or individual that solicits or accepts orders for commodity contracts traded on an exchange and holds client funds to
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a firm or individual that, for compensation or profit, advises others, on the trading of commodity contracts. They advise
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http://www.nfa.futures.org/NFA-compliance/NFA-futures-commission-merchants/index.HTML
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A single firm or individual may be registered and act in more than one capacity.
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Firms and individuals who are often collectively called commodity brokers include:
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http://www.nfa.futures.org/NFA-compliance/NFA-commodity-pool-operators/index.HTML
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323:(ICE) that trades in crude oil, electricity, and natural gas. Others include the
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who are willing to assume that risk from hedgers in hopes of a profit.
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126:. A firm or individual who trades for his own account is called a
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Registered
Commodity Representative (RCR)/Associated Person (AP):
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an individual who trades commodity contracts on the floor of a
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is a firm or an individual who executes orders to buy or sell
434:"Commodity Brokers: Should You Trade Online or Use a Broker?"
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473:"Floor Broker Definition & Example | InvestingAnswers"
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is conducted in the pits of a commodity exchange via
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to margin are held by a FCM associated with the IB.
142:. Clients who trade commodity contracts are either
315:(NYMEX) that trades in a variety of commodities,
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457:Why Commodity Traders are Fleeing the Business?
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41:Relevant discussion may be found on the
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531:National Futures Association (CPO) -
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544:Staff, Investopedia (2004-12-12).
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438:The Balance
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148:speculators
570:Categories
555:2018-10-21
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443:2018-10-21
419:2018-10-21
395:References
379:Hedge fund
335:, and the
284:Regulation
251:and offer
181:currencies
124:commission
73:newspapers
461:Bloomberg
359:Commodity
325:CME Group
307:Exchanges
264:manager.
43:talk page
343:See also
173:equities
154:History
144:hedgers
136:options
132:futures
87:scholar
349:Broker
225:margin
165:energy
161:metals
128:trader
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