Archives: 2007 August

With the popularity of trading commodities futures online greater than ever it is important for the prospective trader to be sure that he is dealing with a reputable firm involved with Internet commodity trading.

The National Futures Association (NFA) is the industry wide, self-regulatory organization for the U.S. futures industry. The NFA develops the rules, programs and services that safeguard market integrity, protect investors and help their Members meet their regulatory responsibilities. While the NFA is a self policing industry organization it works closely with the US government’s Commodity Futures Trading Commission (CFTC) to provide protection to the investor from fraudulent practices.

One of the first things any investor should do before trading futures is conduct a background check on the firms and individuals offering these products. Using NFA’s Background Affiliation Status Information Center (BASIC), investors can quickly and easily check the registration status and disciplinary history of every firm and individual conducting futures business with the retail public.

Just a few minutes spent at the NFA website may save you whatever amount of risk capital that you have set aside for commodity futures trading. However, you should be aware that any commodity firm that has been operating for a long time and that has a large customer base will likely have a few complaints filed against it from customers who lost money while trading with the firm. The losses may be from the poor trading methods of the customer and not from improper behaviour on the part of the commodity trading firm.