How to Become a Commodities Broker
Becoming a commodities broker is similar to acquiring the licensing to be any other type of securities broker. Commodities brokers trade futures, one of the most complicated and risky forms of securities to trade, and relatively few brokers know how to trade in them. Commodities brokers need a Series 3 license to trade futures.
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Instructions
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Trading Commodities
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Study for the Series 3 exam. The test does not change significantly from year to year, aside from alterations in the questions. Consider purchasing study material or contracting with a tutor to prepare for the test.
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Acquire the Series 3 license. This requires taking an exam that tests general knowledge about commodities and futures, legal issues and ethical customer care questions. The test is issued by FINRA (Financial Industry Regulatory Authority), and the National Futures Association requires it for a commodities broker's license.
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Take the Uniform Securities Agents State Law Examination. Passing this test is necessary for brokers in most states, and to achieve employment at many large firms. This test covers securities law and the responsibilities of brokers to their clients and employers.
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Look for work as a commodities broker. Small brokerage firms and larger investment houses alike need brokers to serve their clients. A Series 7 license will allow you to trade regular securities in addition to futures. Some larger investment houses will not will be looking for the ability to trade securities as well as commodities.
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Continue education to maintain your licenses in good standing and to refine trading and sales practices. Most companies that employ commodities brokers will compensate for continuing education, courses and books to improve a broker's job performance.
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Resources
- Photo Credit wrhowell, Flickr
