Futures Trading Brokers
People using futures trading brokers can have confidence that they are licensed, trained, and expert in the securities field. Futures investing is both alluring and complicated. However, there are distinct differences between the security of the banking world and futures trading. In banking, deposits are guaranteed by the federal government. Whereas, stocks, bonds and other securities can go up or down in value. Investing in futures is not for the faint of heart. "Do not take a pair of millstones--not even the upper one--as security for a debt, because that would be taking a man's livelihood as security." (Deuteronomy 24:6)
The absolute best way to protect money that is put into the securities markets is by researching, analyzing, and asking lots of questions. Like most other brokers, a futures trading broker acts as an agent between a seller and buyer. The agent normally is paid by charging a commission; which is a percentage of the value of the transaction. The broker is expected to earn a commission by developing and maintaining the trust of the client. Then, once a relationship has been established, the agent is expected to advise the individual according to that person's desired investment needs. The job of the broker is to assist the buyers and sellers, by coaching and counseling them in making the most beneficial transactions. When done well, investing can be very fruitful.
In the case of licensing, futures trading brokers must acquire a license to act as a registered representative; according to the National Futures Association (NFA). The prospective licensee must sit for an exam called the Series 3. Administered by the Financial Industry Regulatory Authority (FINRA), it entitles the license holder to sell commodities or futures contracts. The educational aspects covered in the examination include the following ten categories: 1) Futures Trading Theory, 2) Orders, Accounts, Analysis 3) Margins, Limits, Settlements 4) General Speculation, 5) Basic Hedging, 6) Spreads, 7) Financial Hedging, 8) Financial Speculation 9) Options, and 10) Regulations. The examination is subdivided and graded in two parts. The first part, Market Knowledge, has 85 questions and is comprised of the first nine categories. The second part of the examination is developed from just one category; Rules and Regulations. This part of the exam has 35 questions and therefore is 30% of the grade on the examination. A passing score is 70% or better.
Furthermore, futures trading brokers must take course in ethics and anti-money laundering. Established in 1989, the Institute For Financial Markets (IFM) is an independent, nonprofit foundation which focuses on education. Some of the course offerings of IFM include: Initial /New to Industry Ethics Training, Periodic Ethics Training, and Anti-Money Laundering (AML) Compliance. The initial course in ethics incorporates legal requirements, regulations, and sound judgment aspects involved in making transaction execution decisions; dealing with conflicts of interest; marketing and advertising, and educating clients. It also covers the licensee's obligation to the public, industry relationships, proper disclosures, and appropriate handling of funds.
Built upon two hypothetical case studies that take place in different securities firms, this 2nd course in ethics (for futures trading brokers) covers law, regulation, professional ethics and sound judgment. The core of the program involves determining what constitutes suspicious behavior by a prospective client, how to handle pressure to rush the approval of opening an account, what to do when there is a questionable financial purpose for opening an account, soliciting new clients, how to operate on the internet, proper disclosures, as well a other related topics. As for the AML course, all manner of money laundering and their hazards within the securities industry are uncovered. Learning the regulations designed to detect, monitor, and prevent criminal actions is the primary function of this course. Sharpening the skills of the registrant in their daily activities and in the future conduct of the futures business is the goal.
In addition to the educational requirements, all futures trading brokers associated with a company engaged in the buying and selling of securities (including partners, officers, directors, branch managers, department supervisors, and salespersons) are mandated to register with FINRA. Commissioned by the U.S. Congress in 1938, FINRA is a membership self-regulatory organization (SRO) that regulates the securities markets for the peremptory advantage and safeguard of the investor in securities transactions. FINRA determines the strategic objectives and policy dictums of the organization, manages and supervises the effectiveness of each component organization, and makes sure that all organizational statutes and regulations are actualized.
Even after all that education, some futures trading brokers are a disappointment to their clients. There are a great many customers that feel forsaken once the broker gets their initial commission check. The promises to learn about the client's individual needs are often tossed aside once the person sign's on the dotted line. The Securities and Exchange Commission (SEC) is the body of government that protects investors against unsavory practices in the securities markets. They are charged with maintaining fair, orderly, and efficient markets. In their role they have created the Office of Investor Education and Advocacy to serve the needs of investors. All futures trading brokers are expected to do a good job in order to earn their commissions. These agents are expected to give detailed and sage advise to their clients. Analyzing details about the commodities markets and trends will help the client make a decision that they think will be the best for them. When the broker does his or her job well, the client has a better chance of improving their financial portfolio. There is no magic to these types of transactions. Remember, there are no guarantees. But, futures trading brokers can give a person better odds.
The absolute best way to protect money that is put into the securities markets is by researching, analyzing, and asking lots of questions. Like most other brokers, a futures trading broker acts as an agent between a seller and buyer. The agent normally is paid by charging a commission; which is a percentage of the value of the transaction. The broker is expected to earn a commission by developing and maintaining the trust of the client. Then, once a relationship has been established, the agent is expected to advise the individual according to that person's desired investment needs. The job of the broker is to assist the buyers and sellers, by coaching and counseling them in making the most beneficial transactions. When done well, investing can be very fruitful.
In the case of licensing, futures trading brokers must acquire a license to act as a registered representative; according to the National Futures Association (NFA). The prospective licensee must sit for an exam called the Series 3. Administered by the Financial Industry Regulatory Authority (FINRA), it entitles the license holder to sell commodities or futures contracts. The educational aspects covered in the examination include the following ten categories: 1) Futures Trading Theory, 2) Orders, Accounts, Analysis 3) Margins, Limits, Settlements 4) General Speculation, 5) Basic Hedging, 6) Spreads, 7) Financial Hedging, 8) Financial Speculation 9) Options, and 10) Regulations. The examination is subdivided and graded in two parts. The first part, Market Knowledge, has 85 questions and is comprised of the first nine categories. The second part of the examination is developed from just one category; Rules and Regulations. This part of the exam has 35 questions and therefore is 30% of the grade on the examination. A passing score is 70% or better.
Furthermore, futures trading brokers must take course in ethics and anti-money laundering. Established in 1989, the Institute For Financial Markets (IFM) is an independent, nonprofit foundation which focuses on education. Some of the course offerings of IFM include: Initial /New to Industry Ethics Training, Periodic Ethics Training, and Anti-Money Laundering (AML) Compliance. The initial course in ethics incorporates legal requirements, regulations, and sound judgment aspects involved in making transaction execution decisions; dealing with conflicts of interest; marketing and advertising, and educating clients. It also covers the licensee's obligation to the public, industry relationships, proper disclosures, and appropriate handling of funds.
Built upon two hypothetical case studies that take place in different securities firms, this 2nd course in ethics (for futures trading brokers) covers law, regulation, professional ethics and sound judgment. The core of the program involves determining what constitutes suspicious behavior by a prospective client, how to handle pressure to rush the approval of opening an account, what to do when there is a questionable financial purpose for opening an account, soliciting new clients, how to operate on the internet, proper disclosures, as well a other related topics. As for the AML course, all manner of money laundering and their hazards within the securities industry are uncovered. Learning the regulations designed to detect, monitor, and prevent criminal actions is the primary function of this course. Sharpening the skills of the registrant in their daily activities and in the future conduct of the futures business is the goal.
In addition to the educational requirements, all futures trading brokers associated with a company engaged in the buying and selling of securities (including partners, officers, directors, branch managers, department supervisors, and salespersons) are mandated to register with FINRA. Commissioned by the U.S. Congress in 1938, FINRA is a membership self-regulatory organization (SRO) that regulates the securities markets for the peremptory advantage and safeguard of the investor in securities transactions. FINRA determines the strategic objectives and policy dictums of the organization, manages and supervises the effectiveness of each component organization, and makes sure that all organizational statutes and regulations are actualized.
Even after all that education, some futures trading brokers are a disappointment to their clients. There are a great many customers that feel forsaken once the broker gets their initial commission check. The promises to learn about the client's individual needs are often tossed aside once the person sign's on the dotted line. The Securities and Exchange Commission (SEC) is the body of government that protects investors against unsavory practices in the securities markets. They are charged with maintaining fair, orderly, and efficient markets. In their role they have created the Office of Investor Education and Advocacy to serve the needs of investors. All futures trading brokers are expected to do a good job in order to earn their commissions. These agents are expected to give detailed and sage advise to their clients. Analyzing details about the commodities markets and trends will help the client make a decision that they think will be the best for them. When the broker does his or her job well, the client has a better chance of improving their financial portfolio. There is no magic to these types of transactions. Remember, there are no guarantees. But, futures trading brokers can give a person better odds.
Futures Trading Brokers
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