What is a Futures Broker?

A futures broker is a trader that specializes in dealing with commodities futures contracts. 

What are Futures?

What is a Futures Broker?

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Futures are essentially contracts that consist of an agreement to sell a commodity or stock at a set price, but after a predetermined amount of time has passed. 

As the value of the actual product rises or falls, the value of the contract changes as well. 

Required Professional Expertise

A skilled futures broker needs to have a very good understanding of market trends in order to be successful. 

They have to be able to predict if the price on a given commodity will rise or fall, as this allows them to know how and when to buy or sell futures contracts. 

A futures broker deals in a market that is somewhat riskier than traditional stock investing.

This is because commodity values are subject to some very unpredictable risks. 

For example, a fire in a major oil refinery can vastly affect the price of oil.

Similarly, a drought can affect food crop values astronomically. 

These types of factors are not predictable, and present a significant risk as a result. 

A futures broker works for investor clients in order to try and make them money by investing in the futures market. 

Usually, futures investing is the realm of high-net worth clients, as the risk involved necessitates the use of a skilled and knowledgable brokerage. 

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