What is a Futures Broker?
A futures broker is someone who uses risk capital to invest in the futures market. The futures market is like the stock market, only they are trading in predictions of future increases or decreases in commodity prices. Commodities are a standard set of goods, including oil, wheat, pork, steel and salt. The role of a futures broker is to study the commodity market and develop a good understanding of the factors that influence demand and supply for a particular commodity. Then the futures broker puts a specific amount of money down on a position that states a commodity will have a certain value within a predetermined time frame. If the prediction is true, they sell the position for a profit and if it is not true, they lose the money spent. Futures trading is more risky than stock market trading, as the value of a commodity in the short term is affected by a wide array of circumstances. Stock market trading is based on the financial position of a large corporation, and is inherently risky
