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How to Become a Commodity Broker

As a commodity broker you must be licensed and registered with the National Futures Association (NFA). But, in order to do this, you must pass the Series 3 exam. A comprehensive, two-part exam on trading commodities and industry rules and regulations, the Series 3 is a serious test that requires great study and focus. Read more to learn the steps necessary to become a commodity broker.

Instructions

    • 1

      Prepare for the Series 3 examination. Under the direction of course materials or a tutor, study the following areas of commodity trading: general futures market knowledge, orders, options, hedging and trading. Also, study industry standard practices, rules and regulations.

    • 2

      Know where to take the Series 3 exam. The exam is administer by computer at a learning center in most cities. Made up of 125 questions, the test is two and a half hours long. You will be scored for 120 of the questions, as 5 are reserved as sample questions. Click the link below for domestic and international test sites.

    • 3

      Complete an 8-R form with the NFA. Provide your ten-year employment history, five-year residential history as well as criminal history (if applicable). Be sure to indicate all licenses held within the financial sector.

    • 4

      Consent to a background check. Visit your local police office to get fingerprinted.

    • 5

      Get licensed and registered with the National Futures Association (NFA).

    • 6

      Study the practice and approach of an effective and dynamic sales pitch. Trading commodities involves a strong sales background, so investigate ways to incorporate your sales experience into your new job as a commodity broker.

    • 7

      Look for a stock brokerage firm that specializes in commodities. These firms are universally referred to as Introducing Brokers or IBs. You may want to consider a large wirehouse like Merrill Lynch or Morgan Stanley.

    • 8

      Consider chicago. Chicago is a great place for trading commodities. It is home to the CBOT and CME.

Tips & Warnings

  • Most major cities will have commodity brokerage firms.

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