Teacher and consultant to the futures industry since 1983
Teacher and consultant to the
futures industry since 1983
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Items you need to improve and protect your FCM or IB... 1. Very important and useful forms and letters for different applications for the FCM and the Introducing Broker. Visit our "forms" page. |
IS BEING A FUTURES BROKER THE RIGHT THING FOR ME?The move to electronic trading is beginning to scare some of the potential commodity brokers away from the business. If you are considering becoming a Commodity Broker and are one of these people being somewhat deterred from your career goal, let's do some analyzing. It is the opinion of this author only, but I believe the Stock Broker is in much more trouble than the Commodity Broker. The ability of all people to do their trading "on-line" is the scare. Most people can, or believe they can, trade stocks for themselves. They believe they can make their decisions and place the trade. With securities, this is somewhat true. When a person buys a stock, they can remain with the trade for as long as they choose. With the exception of those advanced traders that buy stocks on margin, the stock trader never has to worry about a margin call, and therefore perceives the stock trade as somewhat safe. Whether this is true or not is certainly debatable, but that is the perception. With limited fundamental research, even the beginner can make a trading choice. Also mindful that securities firms DO NOT make money by charging commissions, but rather from the interest charged to the traders who trade on margin, it could be said that the Stock Broker is a liability and is therefore dispensable. The only need then is for the Stock Broker that is expert in estate planning, portfolio management, and institutional investing. That would tend to indicate the possibility of a "down-sizing" in the amount of brokers. Doesn't sound good then for a lot of Stock Brokers when total electronic trading becomes a reality. Now consider the Commodity Broker. Every day there are hundreds of new commodities traders entering the market. Those people range from the pure "gamer" to the serious risk taker looking to get ahead with a part of their designated risk capital. The majority of these new traders are not prepared to enter into such a risky venture without some help. They may try it for a time, but will soon (hopefully) realize that the commodity futures markets are not to be trifled with. These smart people will be ready to pay for your help and the education you can offer. An educator? Yup, I believe the only real surviving brokers will be those who will take the time to constantly be in touch with their customers and offer not only trading advice, but educational assistance. It is very unlikely that the customer will leave you for a discounted commission if you have worked hard for them. Believe it or not, there still is a sense of commitment felt on the part of most people today. They realize that you have worked hard to do your best for them and will remain with you as their broker. The days of the "quick-hit", "high-pressure" broker are ending (thank God), and the honest and sincere representative will be the fittest. You can't fake sincerity, and the customers can detect it. Those who are in this business will be confronted by a more educated prospect because of the internet, and as Martha Stewart might say... "that's a good thing". So, if you are looking for an exciting and ever growing career, come on in, the water's fine! This profession will not suffer from electronic trading, in fact it will grow larger because of it.
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