As you know, trade on the futures markets by the interaction of the three interested parties. From the participation of each of them depends for the transaction. In the process of concluding a futures contract involves all three parties. And the share of each of them has the value of an existing contract. One of the participants of futures contracts is a brokerage company. The broker is an intermediary between the two other parties that conduct futures transactions. But in order to have a greater understanding of the rights and powers of the brokerage center and its role in carrying out transactions worth briefly read the other two participants.
Liquidity Provider for the futures market is. And it is the only entity that owns the right to the installation price. That is why the quotes on futures do not tend to high volatility. As a rule, in the presence of the sole founder of the price range there is a significant stability in the execution of transactions. Exchange also has the right to the execution of the contracts. To participate in financial transactions can everyone that constitute the second category of participants.
The second party of futures trading can be considered anyone who meets the rules of the exchange. To do this, you only need to provide truthful information about themselves, as private traders. If a party is an organization, for example - a bank or other commercial organization, the role of the participant may make a company representative, or must be made registration as a legal entity.
In addition, it is required to open the account, which contains all the tools bidders for transactions in futures contracts. This category of participants are the subjects of trade, and that trade is carried out directly. All futures transactions are made with the help of a third party acts as an intermediary between the exchange and the trader.
Selecting brokerage
This is a third party brokerage center. It was from his work depends trading operations between the Exchange and the trader. To be able to provide the trader's interests in front of the stock exchange, brokerage firm must have legally registered as a financial institution. In this case, you must also have the appropriate license for the provision of such services. Since the broker job can have a direct impact on the success of trade, these requirements are very relevant.
This is justified by the fact that recently there have been imitators brokerage centers. The traders environment they are called "financial kitchens." Their interest has been shown to apply incorrect quotes, distorting received from the exchange. This means a trader involved in the trade, can be displayed for the auction does not fully or not displayed at all. In the case of loss-making deals all funds accumulated on the account of such companies psevdobrokerskoy. Therefore broker choice has to be justified and proven.
Choosing a broker for futures trading, you need to ask about the origin of the company, find reviews of existing traders or other participants in futures trade on this broker.
Powers broker
Brokerage center of its main task is to provide timely information on existing quotes on various trading instruments. Based on these data, the broker center customer analyzes and decides on the conclusion of the transaction.
Another duty of the broker is the need to perform futures transactions on behalf of its client. That is, the broker directly enters into transactions on the stock exchange, respectively, required by the client environment. These conditions include such things as the volume of transactions and the size of the lots. In addition, under a futures trading tool should be displayed, for which is scheduled for commercial operation.
In this case the broker is only entitled to conduct successful transactions with the necessary reserve funds, if the client trusts of such default transactions. transactions are managed by means of filing an order to switch the order. It is carried out via the Internet through the terminal, which is obliged to provide the broker to his client. The warrant indicates the number of lots opened, the total amount of funds to participate in the trade, as well as the name of the trading instrument by which trade is conducted.
In addition to his direct orders, which is served in the form of the order for execution, the broker is obliged to perform other instructions of his client. As already mentioned, it can act on the side of their client at the conclusion of the transaction. Sometimes, the trader may use the opportunity to apply for the inclusion of the order after a certain time, or when a certain price point. To do this, it provided the opportunity to place a pending order. In this case, the broker is obliged to execute this application even in the absence of the client connected.