'Commodity Broker' is explained in detail and with examples in the Economics edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.
A commodity broker commonly is an individual who makes commodity trades for his or her customers. The term also refers to the brokerage company that manages the trades for whom this broker works. This is an oversimplification as there are several different kinds of brokers. Where the CFTC Commodities and Futures Trading Commission is concerned, there are FCM Futures Commission Merchants, IB Introducing Brokers, and AP Associated Persons who are the individuals at the various commodity broker firms.
Commodity brokers do interesting jobs. They are involved in facilitating trades done in the commodity markets on behalf of the typical investor. The main other way to place such trades is by having one’s own seat on the commodities exchange or by trading in the open outcry commodity pits. For the majority of people interested in trading these markets, they will be required to utilize the broker in some fashion to place their trades.
The commodity brokers themselves have one of two ways they can route their clients’ trades through to the exchanges. They may have their company’s floor traders who can place the trade literally on the exchange floor. Otherwise they will possess a special direct link trading platform that will allow them to place and then execute the trades via the electronic system on the various exchanges.
The commodity exchanges depend on these commodity brokers to gather in the business and clients for them. This is because they are unable to do so directly thanks to the governing rules on the way brokers carry out their business. The exchanges find it much simpler to carry out trade with only several dozens of brokerage firms than they do with literally hundreds of thousands of different customers trying to place their particular trades at the exchange directly.
Besides this valuable introducing service which the commodity broker provides, a great number of individual investors and traders need the brokers to offer them both recommendations and general position trading advice. This is because the commodities markets are often hard to comprehend in the beginning. Without the services and assistance of a good commodity broker, many investors would simply never engage in commodities trading ultimately.
Until the 1990s, the realm of commodities trading was limited to only the commodity pits at the various exchanges. The majority of the different orders came in from what was called a full-service commodity broker. The customers would first call their introducing brokers to make them aware of a trade they wished to enter. Next this broker would write up the order and place a timestamp on it. They immediately called their FCM clearing firm which takes their orders. The broker would articulate the exact trade from the ticket which their customer had phoned in to them.
The clearing firm was receiving calls at a special phone bank directly on the floor of the relevant exchange. A clerk would be taking down the order. The clerk would then write up a ticket to hand off to one of the floor brokers. These individuals stood in the trading pits and physically filled the order. The floor broker would then hand back the ticket to a runner who would run it back to the clerk. Finally the clerk would phone the introducing broker back and provide the trade confirmation and fill price. After the broker received his confirmation information, he would contact the original client back to provide the fill price and other information.
This form of manual trading via the telephone has all but disappeared in the past two decades. Now clients simply log on to the trading platform which their broker provided. They enter the trade information and hit buy or sell using their mouse. Such orders instantly route and match up at the relevant exchange’s trading platform so that the confirmation on a market order is no more than one to two seconds away. This has made the trading process far more efficient, less expensive, and faster. Other traders insist on working with the full-service broker model still so they have a professional with whom they can talk about the various trading strategies and possibilities.

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