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Basics of Futures Trading

Trading commodity futures and options is not for everyone. It is a volatile, complex, and risky business. Before you invest any money in futures or options contracts, you should:

• Consider your financial experience, goals, and financial resources and know how much you can afford to lose above and beyond your initial payment.

• Understand commodity futures and option contracts and your obligations in entering into those contracts.

• Understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

• Know who to contact if you have a problem or question.

The CFTC brochures will provide you with general information about trading commodity futures and options. We encourage you to ask more questions and gather more information before you open an account.

The CFTC also issues consumer advisories to alert the public to warning signs of possible fraudulent activity and offer precautions individuals should take before committing funds. We encourage you to review these advisories before you trade.

Additionally, you may wish to visit the National Futures Association (NFA) Investor Services web site for more information and related publications.

Broker Registration and Background Information

Before you open an account, you should always check on the company's or individual's status:

Background Affiliation Status Information Center (BASIC)
Through this online system, National Futures Association (NFA) makes available registration information and futures-related actions contributed by NFA, the CFTC and the U.S. futures exchanges. If you need registration information that's not available in BASIC, you can contact NFA's Information Center at (800) 621-3570.

Administrative Sanctions in Effect List
This list contains the names of firms and individuals that currently have registrations and trading sanctions in effect as a result of administrative and statutory disqualification proceedings.

Reparations Sanctions in Effect Lists
These lists contain the names of individuals or firms who have not paid awards which were levied against them as a result of reparations proceedings.

Proceedings Bulletin
This bulletin contains information about the Commission's administrative and injunctive enforcement actions and its statutory disqualification-from-registration proceedings.