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FCM (futures commission merchant)

A registered firm that accepts futures orders and customer money, and carries the account at the clearing house.

Your futures broker is an FCM or routes to one. It holds your funds, posts margin to the clearing house on your behalf, sets house-requirements and runs the risk engine that can auto-liquidate you.

FCMs are regulated by the cftc and the nfa, must keep customer money in segregated-funds, and file monthly financial data publicly. Checking an FCM's capital and segregation figures is a reasonable thing to do before wiring money.

Example: MF Global (2011) and Peregrine (2012) both failed with shortfalls in supposedly segregated customer funds — a reminder that broker selection is a risk decision, not an admin one.

Related: segregated-funds, introducing-broker, clearing-member, cftc, nfa

Educational only, not advice. Spotted an error? Post in Site Feedback.