How Can I Become a Futures Commodity Broker?
Research what it takes to become a futures commodity broker. Learn about education and licensure requirements, job duties, salary and job outlook to find out if this is the career for you. Schools offering Finance Investments & Securities degrees can also be found in these popular choices.
What Is a Futures Commodity Broker?
Futures commodity brokers are brokers who specialize in trading commodities, such as corn, oil, wheat and gold. They purchase commodities and sell them directly to individual clients. Because they must establish their own client base, they must divide their time between contacting potential clients and actual trading. Some commodity brokers buy and sell commodities online, while others engage in auction-style trading on the floor of an exchange market.
The table below presents some key career facts for those interested in futures commodity trading.
|Degree Required||A bachelor's degree is often required|
|Education Field of Study||Business, finance, economics or accounting|
|Licensure||Varying levels are required depending on duties|
|Key Responsibilities||Assist, solicit or take money and other assets from clients in the buying and selling of futures contracts, foreign exchange options or commodity options|
|Job Growth (2014-2024)*||10% for all securities, commodities, and financial services sales agents|
|Median Salary (2015)*||$71,550 for all securities, commodities, and financial services sales agents|
Source: *U.S. Bureau of Labor Statistics
What Do Futures Commodity Brokers Do?
As a futures commodity broker, you can help buy and sell futures contracts, foreign exchange options or commodity options. Your licensing level determines whether you are assisting, soliciting or taking money and other assets from clients for the purchases. Usually, you focus on a particular type of commodity so that you can develop strong connections in that particular industry and strengthen your knowledge variables that affect the commodity.
What Education or Training Do I Need?
While it is not a requirement to enter the field, a bachelor's degree in business, finance, economics or accounting is usually necessary to compete in the finance industry. In addition, earning a Master of Business Administration could help you advance in your career. Companies often provide on-the-job training as well. This training usually focuses on the specific products and services offered by the firm. Your firm may require you to get training in various departments so that you have a full understanding of operations.
What Licensing Do I Need?
The first test you need to pass to enter into this field is the National Commodities Futures Examination (also known as the Series 3) administered by the Financial Industry Regulatory Authority (FINRA). You can take this test after you've been employed by a registered securities firm for at least four months. Many states require you to pass additional tests, and you can pursue specialized licensing to sell specific services.
In order to advance in this field, you may also need to take the Branch Manager Test (Series 30) and the Futures Managed Trust Test (Series 31). In addition, you must be registered with the National Futures Association and continue to update your knowledge of the industry through extended learning courses and seminars.
What Is the Job Outlook?
According to the U.S. Bureau of Labor Statistics (www.bls.gov), the median salary for securities, commodities, and financial services sales agents, including futures commodity brokers, in 2015 was $71,550. Employment of securities, commodities, and financial services sales agents is expected to grow 10% between 2014 and 2024, with employment growth of commodity brokers being one of the faster growing jobs in this industry. Still, this will continue to be a highly competitive field as the applicants for this industry continue to exceed the number of positions available.
What Are Some Related Alternative Careers?
As a broker, you could choose to buy and sell securities instead of commodities. In this position, you would buy and sell stocks and bonds, either on the floor of a stock exchange or online. The minimum educational requirement is a bachelor's degree. Another financial industry job to consider is work as an investment banker. Their job is to connect investors with companies that need loans to support their operations or facilitate expansion. Like brokers, most investment bankers have at least a bachelor's degree.
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