Definition of Futures Brokers and their Types and Examples

Futures broker is one of the terms that you hear a lot in the investment world. Unfortunately, not a few ordinary people or novice investors do not understand the meaning of this term.

However, you don’t need to worry because in this review we will discuss the meaning of futures brokers. There is an explanation of the types and examples too, you know!

What is a Futures Broker?

Futures brokers are companies, business entities, or institutions whose daily operations are related to commodity transactions. Unlike other companies, futures brokers focus more on commodity transactions based on:

• Derivative contracts
• Customer’s mandate
• Futures contracts

These types of companies exist in different parts of the world. Especially for operations in Indonesia, futures brokers need to be under the supervision of CoFTRA.

Types of Futures Brokers

Futures brokers are divided into four types based on the services provided. So, you can choose a broker according to the services needed. What are the types?

1. Full Service Brokers

The first type is suitable for those of you who have a busy schedule and can’t take the time to analyze the market. Futures brokers who provide full brokerage services mean they provide full service.

The services are quite diverse, ranging from seeking and providing information, conducting market analysis, reporting, to executing instructions from investors.

Unfortunately, for this type of broker, you need to spend more in terms of giving commissions. In line with the service, full service broker commissions are indeed at the top level.

2. Deep Discount Brokers

The second type of broker may look more like an assistant. They have limited services because they only follow transaction instructions from investors.

Those of you who use this type of futures broker can only give orders to maintain or manage accounts and carry out buying and selling transactions.

What about market analysis or issuers?

You need to do it yourself. Here, all the decisions you make and the broker will carry out according to orders. So, you need to equip yourself

with more than enough insight and knowledge about investing.

3. Discount Brokers

This third futures broker is somewhat similar to a deep discount broker. However, the services provided are more diverse.

Its main service is to carry out buying and selling activities according to investors’ directions. However, they can also provide market analysis and recommendations that you need.

Of course, this service is not provided directly. You need to ask for it if you really need help.

4. Online Brokers

The last type of futures broker is perhaps the latest innovation. The reason is that investors and brokers do not need to meet face to face to establish cooperation.

The development of digital technology has become a fairly strong foundation for online brokers in Indonesia and on a global scale. Futures brokers of this type usually utilize an online service system that makes it easy for investors to transact and communicate.

Practical and comfortable are the two main things that you will get if you use this futures broker. Meanwhile, brokers also have access and awider market share thanks to this online service.

Examples of Futures Brokers

The high public interest in investing has also boosted the number of companies with the status of futures brokers. Of course there are legal and illegal companies currently operating.

However, in general you can check legal futures brokers on the official Bappebti website. Currently, there are a total of around 66 companies. Some examples of companies are as follows.

● Forward Futures Fintech
● Langit Indonesia Berjangka
● PT. Deu Calion Futures, and others

For more detailed information, you can access the list itself.

Conclusion

From the explanation above, have you got an idea to find a futures broker that fits your needs?

Make sure to always check the legality of the brokerage company you will choose after determining the type of service you want. Don’t hesitate to look for genuine reviews from previous clients or investors to reinforce your beliefs.

Remember, a futures broker is a party that should help you develop capital, not take away the capital you deposit. Good luck with the investment!