Trading Commissions

Trading Commissions

It is a valid question, but make sure you fully understand the answer before you make a decision on choosing a commodity broker based on trading commissions.
Since about 2005, full-service rates have typically ranged between $30 and $80. Remember, commission rates on futures contracts are paid per contract, not per order.
Comparing commissions are based on a round-turn rate. A round-turn rate covers both the buy and sell sides of a trade. A half-turn rate only covers the buy or sell side of a trade.
The trading style of a full-service commodity broker will play a major part in the commission you will pay. If he wants to make trade recommendations every day, you should expect a commission rate somewhere near the low end of the range. If he only plans on making one trade every month or two, you should expect commission rates on the higher end.
A commodity broker gets paid, but make sure you are paying for solid. It is highly unlikely your account will survive if you are a very active trader paying $80 per round-turn in commissions.
Many new traders will choose a commodity broker based on commission rates. That is not always the best logic to follow. The main reasons for choosing a commodity broker should be whether you think the broker can make you money and you feel he will be a good partner to help you achieve you trading objectives in the futures markets.
Most commodity brokers are willing to negotiate commission rates, especially for their established clients. If you are not able to negotiate lower rates when you open an account, you may be able to negotiate later in the relationship with your broker.
If you have not been making money with your commodity broker, you certainly deserve a break in commissions. However, if you are consistently losing money with your broker, you may want to look elsewhere.
Good commodity brokers are hard to find. I would rather pay more in commissions and consistently make money with a broker instead of take a chance on an unproven commodity broker.