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In the United States, futures contracts and options on futures contracts must be executed on or subject to the rules of a commodity exchange.
But you, as an individual, cannot trade directly on an exchange.
A person or firm must trade on your behalf.
People and firms who trade on your behalf as a customer generally must be registered with the Commodity Futures Trading Commission.
There are two general categories of accounts through which you may trade.
1 - Individual Account.
In an individual account, trading is done only for you.
An individual account may be a "non-discretionary" account, which means that you make all the trading decisions and the broker may not execute any transactions without your prior approval.
In a "discretionary" individual account, you give permission for the firm carrying your account or some third party to make trading decisions on your behalf.
You may open an individual account with a registered Futures Commission Merchant or through an Introducing Broker.
An Introducing Broker may accept your orders and transmit them for execution to a Futures Commission Merchant with which the Introducing Broker has a relationship.
An Introducing Broker is not permitted, however, to accept any funds from you. You deposit funds directly with the Futures Commission Merchant.
In an individual discretionary account, you grant power-of-attorney to a Futures Commission Merchant, an Introducing Broker, one of their Associated Persons, or a Commodity Trading Advisor to make trading decisions on your behalf.
2 - Commodity Pool.
You may also trade commodities through a "commodity pool."
In a commodity pool, you are purchasing a share or interest in the pool, and trades are executed for the pool, rather than for the individuals who have interests in the pool.
Pool participants share ratably in gains or losses.
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