Commodity Brokerage Firms

Brokerage firms serve as a vital link between buyersservices in addition to executing orders of their
and sellers in ensuring trading of commodities throughclients. Under value added services, these firms
exchanges. These are the firms which actuallyusually provide key market intelligence through
execute sales and purchase orders of traders onpublished news letters and personal advice. These are
exchanges against a specified rate of commission. Incalled full service commodity brokerage firms in the
addition, these firms take their own positions inmarket jargon, and they charge a relatively high rate
markets. As sophisticated players of commodityof commission. In contrast, there are firms which
trading, these firms are also consulted by majoroffer few services other than executing their clients'
traders on likely demand and supply scenariossale and purchase orders. But, on the other hand,
regarding commodities and consequent marketthey also charge comparatively low rates of
dynamics.commission.
The agriculture commodities traded on majorSome of these offer discounts to the prevailing
exchanges include soybean, cotton, corn and wheat;commission rates in the markets. These are called
crude oil is one of the major non-agriculturediscount brokers. Then, we have brokers in the
exchange-traded items. Commodity brokerage firmscommodity markets which offer even higher
are equally active in options as well as futuresdiscounts to their clients. The latter are known as
markets.deep discount brokers. While big traders generally go
Commodity brokerages operate along the same linesfor full service, smaller traders prefer discount
as their counterparts in stock, bond and currencybrokers in order to limit costs and increase profit
markets. The big ones usually provide value addedmargins.