How Money Flows on a Futures Tranaction

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Cold, hard cash is the lifeblood of the futures market. Since delivery of the grain is not required, money is the required “commodity” in the absence of the cash commodity.

 

The cost (commission) to execute a trade at a futures exchange ranges from 59 cents to $150 per 5,000-bushel contract. The typical “full service” commission is $75 per round turn (buy and sell). The commission on mini-contracts (1,000-bushel contracts) is about half as much per contract, but three times more per bushel. The variance in the commission amount is due to brokerage firm policies, the amount of service you request to receive from your brokerage firm and your broker, the quantity of contracts you trade, etc.

How Money Flows on a Futures Tranaction

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