A futures commission merchant is an individual or organization accepting orders to buy or sell futures or futures options. Certifion of futures commission merchants is required by the Commodities and Futures Trading Commission. A futures commission merchant conducts transactions in the futures market similar to that of a broker in the securities market. In addition to accepting buy or sell orders, the futures commission merchant may also hold their client's money or securities in margin accounts in accordance with the rules of the exchange on which they are trading. Some full service brokers may also conduct business as a futures commission merchant.
A futures commission merchant is authorized to conduct transactions in futures contract orders and extend credit to customers who seek to enter such contracts. Such customer include many of the brokerages that investors in the futures markets deal with.
