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How Do I Become a Discount Futures Broker?

Helen Akers
Helen Akers

In order to become a discount futures broker, an individual needs to pass the Series 3 exam, register with the National Futures Association (NFA), and secure a position with a futures brokerage agency. An alternative to obtaining a position with an agency is to establish your own brokerage business. A few brokerage agencies solicit candidates for sponsorship. The sponsored candidate will temporarily secure a position with the agency, but is required to pass all testing and licensing requirements.

The first thing you need to do to become a discount futures broker is to decide if you want to obtain Series 3 sponsorship from an agency. Internet job board sites as well as local newspapers and trade magazines may feature advertisements for brokerage positions. In the job advertisement, it may state that the agency is willing to train and hire candidates who successfully complete the Series 3 exam requirement within a specified period of time.

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Passing the National Commodities Futures Exam or Series 3 exam is a requirement to become a discount futures broker. The exam covers the market rules and regulations involved in trading commodities and futures. Adequate preparation for the exam is strongly recommended. Exam preparation materials are available through a variety of vendors if you choose to obtain your exam certification without sponsorship.

To register for the Series 3 exam, contact the Financial Industry Regulatory Authority (FINRA). They administer the exam from multiple locations on most weekdays. The test consists of 120 multiple choice questions and takes approximately two and a half hours to complete. A score of at least 70 percent needs to be obtained in order to pass.

Once you have passed the Series 3 exam, the next step to become a discount futures broker is to register with the NFA. This registration should be completed as an "Associated Person." You will need to submit an online registration form, fingerprint cards, proof of your Series 3 exam results, and a non-refundable fee. A verification of the registration form will also need to be conducted.

After you are registered with the NFA, you have the choice of starting your own firm or obtaining a position with an established agency. If you obtained sponsorship from an agency prior to completing your exam and registration, you have completed all the necessary steps. The company who sponsored you may have additional requirements and training that you will need to complete.

If you did not obtain sponsorship prior to taking the exam, you will need to conduct a job search to become a discount futures broker. Professional organizations, career services, employment placement agencies, newspaper and online classifieds are a good place to start. As a candidate who has already secured Series 3 licensing and registration, you may have an advantage over other applicants who have not.

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