How to Become a Commodity Broker
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Working as a commodity broker is similar to the profession of stock broker, except you will work with clients to help them trade commodity futures contracts instead of stocks, bonds and mutual funds. There are no previous employment or education requirements to become a commodity broker. The job does require an interest in the trading markets, the ability to understand complex mathematical and financial concepts, and some skills as a salesperson. Once you have entered the commodity brokerage business, there are many directions you could take your career.
Look at your education and work background for the experiences that make you attractive for a commodity brokerage firm. For recent graduates, a degree in a financial discipline may be a plus, but even a more fuzzy course of study can be a stepping stone if you show how you learned to work with people. If you have been working, sales experience in another type of financial product such as insurance or investments would appeal to an employer. Personal experience with commodity trading is another type of experience that can help you land a commodity broker job.
Find a commodity futures brokerage firm that is willing to sponsor you to become licensed as a broker. In financial services terminology, sponsoring means you will have a job with the company, assuming you meet the registration requirements and pass the licensing test. A commodity broker is a job you can find on your own and will probably not see advertised. Visit brokerage firms in your area and talk to them about becoming a broker. The typical brokerage firm is willing to bring on a new broker that shows she would be an asset to the company.
Arrange for a study course to prepare for the National Commodity Futures Examination, commonly referred to as the Series 3 test. You cannot work in the commodity broker business unless you pass this 120-question test. Most brokerage firms will provide some sort or exam prep for new potential brokers. You may get a self-study course or go to a class for several days.
Schedule and take the Series 3 test. The exam is administered by the Financial industry Regulatory Authority, which handles the registration and testing for the stock brokerage industry. FINRA has testing centers around the country. You make a reservation with FINRA for the location and date of your test.
With your passing test score, complete the National Futures Association Form 8-R to register as a commodity broker. The firm where you will work as a broker will assist with the form and send it in to the NFA. Getting the sponsorship, passing the test and registering as a broker is just the start to actually working successfully as a commodity broker. Your new firm will put you through an extensive training program to teach you the ropes of the commodity business.
A career as a commodity broker is a line of work that has no hard and fast qualifications to get a job. Brokers come from a wide range of education and work experience backgrounds. The work does require the ability to understand complex financial topics and the use of technical systems. Most broker work also includes interacting with the public, where people skills are a necessity. Before committing to a job offer, you may want to ask a prospective employer if you can go for a "ride along" and watch a broker at work for a day or two.
- A career as a commodity broker is a line of work that has no hard and fast qualifications to get a job. Brokers come from a wide range of education and work experience backgrounds.
- The work does require the ability to understand complex financial topics and the use of technical systems. Most broker work also includes interacting with the public, where people skills are a necessity.
- Before committing to a job offer, you may want to ask a prospective employer if you can go for a "ride along" and watch a broker at work for a day or two.
Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. His work has appeared online at Seeking Alpha, Marketwatch.com and various other websites. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy.
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