Establishing an Account

At the time you apply for a commodity trading account, you can expect to be asked for certain information beyond simply your name, address and phone number. The requested information will generally include income, net worth, what previous investment or commodity trading experience you have had, and any other information needed in order to advise you of the risks involved in trading futures contracts.

At a minimum, the person or commodity firm who will handle your account is required to provide you with risk disclosure documents, acknowledgment that you have received and understood them. Opening a futures account is a serious decision, no less so than making any major financial investment, and should obviously be approached as such. Just as you wouldn't consider buying a car or a house without carefully reading and understanding the terms of the contract, neither should you establish a trading account without first reading and understanding the Account Agreement (download) and all other documents supplied by your broker. It is in your interest and the firm's interest that you dearly know your rights and obligations as well as the rights and obligations of the firm with which you are dealing before you enter into any futures transaction.

If you have questions about exactly what any provisions of the Agreement mean, don't hesitate to ask. A long and continuing relationship can exist only if both parties have, from the outset, a clear understanding of the relationship. Nor should you be hesitant to ask, in advance, what services you will be getting for the trading commissions the firm charges. As indicated earlier, not all firms offer identical services. And not all clients have identical needs. If it is important to you, for example, you might inquire about the firm's research capability, and whatever reports it makes available to clients. Other subjects of inquiry could be how transaction and statement information will be provided, and how order types will be handled and executed.

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Information is believed to be reliable and is provided 'as is' without warranty.