How to Choose the Best Commodity Trading Company?
If you are speculating commodities, then you’ll have to find a good commodity broker where you can order your trade. With more than 1,000 brokers in the US today, finding one that suits your preferences may not be as easy. Aside from this, a lot of stockbrokers who sell commodities contracts are not authorized. Hence, when you’re choosing a commodity trading company, it is important to do your homework.
Local Commodity Brokers
The best way to find a broker specializing in commodities is to check the phone book and contact local brokers. The first thing you should ask is: what kinds of commodities do they offer? You may also want to know how much starting capital do they require and the charges they impose. It is best to know beforehand how much commission you are bound to pay so you know your actual income and whether there are other brokers who offer smaller transaction fees.
Once you’ve decided on a local broker, you may want to visit their office so you can see how they conduct business. It is always advantageous to meet the commodity broker before opening an account so you can throw out the few rotten apples. Also, if you’re going to deal with a big company, then you may want to meet the representative who will personally handle your account so you can decide for yourself if he is really knowledgeable about commodity trading.
You should also ask for references, and try to communicate with them in order to determine exactly their comments about the firm. If you’re an experienced broker, you can conduct the transaction over the phone or through the internet and determine from their responses how efficient their system is.
Online Commodity Brokers
For people who are looking for discount commodity brokers, the best way to do it is through online broker directories. There are actually hundreds available online, some listing complete office addresses, phone and fax numbers, websites, years of operation in the industry and even complaint histories and client reviews. While these companies may offer cheaper transaction fees, you might have issues checking their background. One way to do this is to check communities for commodities brokers and get feedback from the members. Ask about how fast their customer support responds, and pay strict attention to brokerage commissions and the different features of their trading platform. Chances are, you’ll get unbiased reviews which can then help you in choosing the best commodity broker.
Back to: Commodity Trading