1. Money

How Much Money Do Commodity Brokers Make?

By

Commodity brokers are usually paid on a commission basis, which means they get paid a percentage of the commissions from the trades their clients place. Since some commodity brokers are very good and many brokers fail in the first six months, it is very difficult to give an accurate estimate of what a typical commodity broker gets paid.

Commission rates have decreased substantially since the late 1990s with the advent of online trading and that obviously had an impact on how much money a commodity broker makes. Even so, there are still many commodity brokers who make a very good living and there are still many who want to become commodity brokers.

Having been involved in the industry for more than 15 years, I will give some of my rough estimates on how much money commodity brokers make. There are new brokers who break into the business who struggle to make enough to pay the rent. They have to build a book of business and keep it in order to make a decent living. This normally takes about six months to a year and a high percentage don’t make it. This group would be below the poverty line.

Then we have another category of brokers who have been in the business for a few years. They have a decent book of business and they make a decent living. They are neither excellent salesmen nor excellent traders. Therefore, they can never seem to generate enough revenue to crack six figures. This group of brokers tends to make about $30,000 to $70,000.

Then we have the top tier of commodity brokers. They are either excellent salesmen or very good traders. A commodity broker who is an excellent salesman or marketer can bring in enough new business to keep his book growing, even if he or she is a mediocre trader.

There is a small percentage of commodity brokers who are very good traders and the business seems to find them, normally through referrals or reputation. These brokers also tend to get larger accounts, which typically means larger amounts of trades and commissions. The excellent salesmen and very good traders tend to make in excess of $100,000 a year. A small percentage of them make well into six figures and sometimes seven figures.

  1. About.com
  2. Money
  3. Commodities
  4. Becoming a Broker
  5. Commodity Brokers Income - How Much Money Do Commodity Brokers Make

©2014 About.com. All rights reserved.