Allied Market Research

2024

Commodity Contracts Brokerage Market

Commodity Contracts Brokerage Market Size, Share, Competitive Landscape and Trend Analysis Report by Deployment, by Enterprise Size and by End-Use Industry : Global Opportunity Analysis and Industry Forecast, 2023-2032

BI : Financial Services

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Author's: | Onkar Sumant
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A commodity broker is a company or individual that executes orders to buy or sell commodity contracts on behalf of clients and charges them a commission. Futures, options, and other financial derivatives are examples of commodity contracts. Clients who trade commodity contracts are either hedgers that use the derivatives markets to manage risk or speculators, which are willing to take on that risk from hedgers for profit. Brokerage firms trade stocks, bonds, commodities, and other financial assets on behalf of their clients in the market. 

In addition, several commodity brokerage firms offer various types of investment advisory services, such as personalized assistance and portfolio management, financial planning, and client wealth management. Commodity brokerage firms are registered with the Stock Exchange Authority (SEA) in their respective countries to provide these services globally.

The global commodity contracts brokerage market is segmented on the basis of deployment, enterprise size, end-use industry, and region. Based on deployment, the market is bifurcated into cloud and on-premises. In terms of enterprise size, the market is categorized into large enterprises and small & medium enterprises (SMEs). On the basis of end-use industry, the market is divided into banks, brokerage firms, investment management firms, trading & exchange firms, and others. Geographically, the market is analyzed across several regions such as North America, Europe, Asia-Pacific, and Latin America, Middle East & Africa (LAMEA).

Top Impacting Factors

Lower commission charges and automated trading platforms, higher transparency due to the adoption of digitalization in brokerage firms, and customer satisfaction by online brokerage platforms are driving the growth of the market. However, the higher risk of bankruptcy of brokerage firms is expected to hamper the growth of the market. Contrarily, better returns after a correction in the stock market can be seen as an opportunity for the market.

Lower Commission Charges and Automated Trading Platforms

Most brokerage firms have implemented zero commission fees per order as a strategy to keep clients from switching to competing brokers. These services, such as margin loan interest rates, bank account deposit fees, and fee income, benefit such zero commission brokers. To retain customers, major players such as E-Trade, TD Ameritrade, Charles Schwab, Fidelity Investments, and Freetrade UK implemented such strategies. 
Several companies have invested in algorithm-trading technologies to transit from traditional services to enhanced customer experiences. Automated pre-programmed trading instructions based on variables such as time, price, and volume execute orders automatically, improving customer experience and boosting the growth of the commodity contracts brokerage market.

Customer Satisfaction By Online Brokerage Platforms

The majority of online brokers are more of a tool supplier than a provider of advice. They provide charts, research, and execution tools but do not make specific investment recommendations. This is distinct from a firm that serves as an investment advisor. Investing became more of a do-it-yourself endeavor after the brokerage industry went online. One-on-one advice that provides specific investment ideas is still available, but usually through higher-commission accounts. 
Some commodity brokerages use a hybrid model in which they recommend asset allocations based on the goals of their clients. Furthermore, brokers with their analysts, such as MerrillEdge, make their company research reports available to clients. These are the major factors propelling the market growth of the commodity contracts brokerage market.

Key Benefits of the Report

  • This study presents an analytical depiction of the commodity contracts brokerage market forecast along with the current trends and future estimations to determine the imminent investment pockets.   
  • The report presents information related to key drivers, restraints, and opportunities along with a detailed analysis of the commodity contracts brokerage market share.     
  • The current market is quantitatively analyzed to highlight the commodity contracts brokerage market growth scenario.         
  • Porter’s five forces analysis illustrates the potency of buyers & suppliers in the market.    
  • The report provides a detailed commodity contracts brokerage market analysis depending on the present and future competitive intensity of the market.

COVID-19 Scenario Analysis

  • Globally, brokerage firms have been subjected to regulatory changes, as well as interruptions in their business operations, as a result of the pandemic. For example, in the Philippines, stock exchange regulators temporarily halted trading to protect the country's traders.
  • Furthermore, a decline in crude-oil prices in the U.S. has caused many Indian brokerage firms to incur losses as they provided clients with cash credits to take positions in larger contracts. Thus, the COVID-19 has negatively affected the commodity contracts brokerage market.

Questions Answered in the Commodity Contracts Brokerage Market Research Report

  • Which are the leading players active in the commodity contracts brokerage market?
  • What would be the detailed impact of COVID-19 on the commodity contracts brokerage market size?
  • How the current commodity contracts brokerage market trends would influence the industry in the next few years?
  • What are the driving factors, restraints, and opportunities in the global market?
  • What are the projections for the future that would help in taking further strategic steps?

Commodity Contracts Brokerage Market Report Highlights

Aspects Details
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By Deployment
  • Cloud
  • On-Premises
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By Enterprise Size
  • Large Enterprises
  • Small & Medium Enterprises (SMEs)
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By End-Use Industry
  • Banks
  • Brokerage Firms
  • Investment Management Firms
  • Trading & Exchange Firms
  • Others
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By Region
  • North America  (U.S., Canada, Mexico)
  • Europe  (UK, Germany, France, Spain, Italy, Rest of Europe)
  • Asia-Pacific  (China, Japan, India, Australia, South Korea, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
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Key Market Players

Interactive Brokers LLC, Zerodha Broking Ltd., DEGIRO, The Charles Schwab Corporation, The Vanguard Group, TD Ameritrade, E-Trade Financial Corporation, Fidelity Investments Inc., Revolut Ltd.

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Commodity Contracts Brokerage Market

Global Opportunity Analysis and Industry Forecast, 2023-2032