Starting a Commodities Business

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If you want to start a commodities business, you should posses the right knowledge, skills, and experience in trading commodities. You have to obtain a CTA certificate and form an LLC.

Comply with the requirements of the SEC and other government agencies. You can consult with a lawyer to help you with all the legal matters.

Starting a Commodities Business

Starting a commodities business is no joke. You will have to create an LLC or Limited Liability Company and obtain a CTA (Commodity Training Advisor) certification. If you’re a skilled trader, this is a great way to make money especially if you’re good with the trading derivatives. You should be aware that the Security and Exchange Commission has stringent guidelines that you should follow in order start a commodities business. If you can follow these guidelines, you won’t encounter any problems with the SEC. To get your certification, you should consult with the Commodity Trading Futures Commission or CTFC.

Once you have the certification, you will receive incentive or management fees since you’re now a professional money manager. After you’ve applied for the CTA certification, you will now have to pass the National Commodity Futures Examination. This is also called Series 3 and to pass, you have to get at least 70%. Contact the National Futures Association to get the necessary info on how to get certification. If you want to attract potential investors, you need to show your annual performance as a good commodity trader. Create a portfolio that shows the trading style you use, draw downs, percentage gain, trading details, and the final results you’ve obtained.

Seeking the Help of a Lawyer

You can consult with a competent lawyer to help you in starting a LLC. You will conduct the commodity trading through the company you’ve formed. This is necessary to limit the liability just in case of a litigation or catastrophic loss. You can attract clients through stock brokerages and advertisements. When talking with your clients, you can have to show your disclosure document to inform them of the trading results, fees, losses, trading methods, business info, and other pertinent info. Comply with all the requirements of the law to avoid any problems.

When starting a commodities business, you should possess adequate knowledge about the industry. If you are not familiar with the procedure, you can hire a lawyer who knows how to deal with the SEC and other agencies connected with commodities trading. So what are you waiting for? Find out how you can establish an LLC and before you enter this kind of business, you should have considerable experience in commodities trading for a couple of years. This is important since you will be taking an exam regarding commodities trading. You can also use the internet to enhance your knowledge about the industry. Work out the plan of action and you can start your own business.

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2 Comments

mukesh said on July 10, 2012
start commodity business in mcx & figical. my place mathura u.p. pls suggest knowledge this business.
parth said on August 20, 2012
how much rupees needed to start this commodity business?

Starting a Commodities Business