• 16
  • Mar
How to find a right Commodity Broker

How to find a right Commodity Broker

In commodity markets, it is more important to select a right commodity broker to deal with or to trade with the commodities. The investor prime decision does not include purchasing an option for the future, the prime decision is to choose a good commodity broker. Choosing a good commodity broker is only in the hands of a trader, which he can choose by understanding their previous reports of trading and the market value of that broker. For trading and making profit out of it you should first have the complete knowledge and then choose the broker who will help you in your business, and have some good mutual understanding which can lead you on the road of success.

About commodity futures and commodity brokers

If we have to define commodity market, we can say that it is the meeting place of a seller and a buyer who want to trade in the commodities. Here, they conduct the business on the spot or for the future trading. In commodity market, when you start trading there exist a legally binding agreement, know as a trading contract that define as an asset. The quantity of that asset to be delivered in the month, these contracts are on monthly basis, and while doing the contract we have to pay some initial payment to have surety for the deal. If you want to purchase commodities or want to take the delivery on the spot then you have to pay the complete amount. If a future contract is sold the correct term to “take delivery” is referred as “making a delivery”.

These contracts of commodity dealing can be written for any type of commodity dealing such as lumber, livestock, gold, currency, grains and many others. The future market is handled by several future market commodities for specific field such as Multi Commodity Exchange (MCX), National Commodity and Derivatives Exchange (NCDEX), National Multi-Commodity Exchange (NMCE) and Indian Commodity Exchange (ICEX), the ACE Derivatives exchange (ACE)and the Universal commodity exchange (UCX).

Two types of brokers

Every broker has some pros and cons in them that should be considered while making a decision. There are two types of levels of a commodity broker, which provide us commodity services according to the needs of the investor, either it will be a full time service brokers or it may be a discount service broker.

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Full-time service brokers:
This type of brokers are usually recommended for the new traders or to the new investors in the commodity market. They are also known as the introductory brokers because it gives a complete knowledge about the commodity market to the trader. They are also known for the specialization in this field. The fees of these brokers are high because they use to give lot of efforts, to make a beginner trader understand about the market.

Discount brokers:
These brokers are pretty expertise in the commodity market and love to work with the experienced client, they give their little time to the client and charge less fee as compared to the full time service brokers.

How to find the right commodity broker:

Commodity broker or Commodity tips providers are the one who will help you to make good trades and will help you in provide good knowledge about the particular commodity, in which you are investing. Also deliver profit driven commodity tips to increase your profit percentage. So, it is very important to find the right commodity broker. For that before selecting any one you have to do some research of the brokers, their market value, from when they are working, how was the experience of their previous clients and are their current clients satisfied or not. You should also look for the experienced broker because, they knew how to handle the market in the ups and down of the commodities.

Trial period:
Many commodity brokers gave a trial period of a particular time duration, so judge them in that duration and make a decision whether to work with him or not.

The key role in the commodity market is played by the broker you choose, and the decision taken by the mutual understanding of the broker and the trader. So it’s very important to you to choose a right commodity broker who can lead you to the road of success.