If we want to buy and sell futures contracts, we can do so only through a broker. Only a broker is one who has the right to buy and sell commodities, shares (but also options, bonds, etc.).
Of course, he also pays a patin fee for this service, or a brokerage commission (so-called commission or so fee). This commission then finds itself for the complete execution of the trade (ie entry into the position and entry from the position) or round turn (RT). Some brokei there for two hundred and half of the RT commission when entering the market, the other half when entering the market.
In practice, the whole process looks like this:
You are determined to trade commodities and stocks, so the first thing you need to do is find a broker who will buy (and sell) commodity futures contracts and stocks for everyone. The broker is then in the means to which you communicate all requests in the form of so-called orders. So if you want e.g. to buy the XY commodity for the price of 100, you will call and give the broker the order roughly as follows: BUY (buy) 1 XY commodity contract for the price of 100
- You should also enter the position of your stop-loss together with the purchase order:
SL (stop-loss) 100 USD from the executed entry.
- And possibly your entry price (so-called profit target):
PT (profit target) $ 1,500 from foreclosed entry.
Of course, if you have agreed with the broker in advance, you can give him two forward and instructions on how and when to move the stop-loss, etc. Everything can be agreed with the broker and there is practically no limit to what he could and should give for the broker, i nedlat.
When the broker receives the order, he will take care of his as fast and fast filling as possible, through his hunter directly on the trading floor (so-called local). As soon as the broker receives from his local confirmation of fullness (ie confirmation that the commodity contract has also been purchased and sold), immediately this confirmation will be sent back to you. So in a short time, you should get the following first for any good broker: COMMODITY XY PURCHASED FOR THE PRICE OF 100.
As you can see, nothing complicated after trades makes communication with your broker as easy as communication with your neighbor if you have a neighbor.
Different types of services
Brokerage services are generally divided into 3 types. Each type of service includes another service and each type of service can be completely different from the brokerage commission.
1. Full service (or so FS)
This is a service in which, in addition to buying and selling commodities and shares for your broker and thus fully fulfilling your purchase and sales orders, you have one year for all consultations, advice, tips, recommendations, etc. (the variety of FS services varies brokerskch dom vrazn li).
First, FS broker services should be sought after. A good FS broker will teach me a lot of new things, help me in arrivals, etc. FS services can be very expensive (as opposed to discounts and online services), but you should realize that as a arrest without someone who will be in the stock. at least catch up a little, you can’t do it. FS broker will learn how to properly order orders, and in detail everyone will get acquainted with many different types of orders.
2. Discount service
As the word discount suggests, it is a cheaper service, but in the case of such services you will not get it practically anything extra. As part of the discount, you will only provide your broker by phone and e-mail with a specific, correctly formulated purchase and sale orders and days of advice, and you cannot expect it.
Traders using the discount service must control it perfectly with no order, no one will check your orders, but will correct them.
3. On-line service
This is the cheapest way of trading, in which you do not come into contact with the broker at all. All orders are entered electronically via pot (via the so-called online trading platform). For online shopping and sales of commodities and promotions, all you need is a sweat and an internet connection (+ a platform that you get for free from the brokerage house where you open it).
For the online service, pay several times less for the FS service, but no one can give it a single piece of advice. We do not strongly recommend it for new online traders, because we know from our own experience how easy it is to “click”, enter the wrong order and order (which no one checks it after all), and so in the end buy and sell something that you originally they didn’t want to.
The indisputable advantage of online shopping is the fact that orders go mostly from your home directly to the trading floor, so the purchase and sale of commodities and the action in this way is again a bit faster.
Of course, not all brokerage houses offer all 3 types of service, and those that do can have each of these types of services named completely differently, even if the basic principle is always the same.
ryvek is from the book
“Trading on commodity markets”
vydan nakladatelstvmCity Publishing,
For more information, visit www.grada.cz