Financial Glossary Header Image

Commission Agent

Updated on July 18, 2023

A commission agent, also known as a commission broker or a commission agent, is an intermediary or a middleman who acts as a facilitator in the commodity market. In simple terms, they serve as a link between buyers and sellers of commodities.

Commission agents are licensed professionals who work on behalf of their clients, who may be either buyers or sellers of commodities. Their primary role is to assist clients in executing their trading orders in the commodity market. Commission agents earn a commission or a fee for their services, usually a percentage of the transaction value. This fee is agreed upon in advance between the agent and the client.

What is the role of commission agents?

The role of commission agents in commodity markets is explained hereunder.

Commission agents act as representatives for clients, connecting buyers and sellers in the commodity market.

They analyze market trends and provide valuable insights to clients based on their research.

Commission agents negotiate favorable terms and conditions for commodity transactions on behalf of their clients.

They handle the logistical aspects of trade execution, ensuring smooth and efficient transactions.

Commission agents supply clients with market updates and relevant information to support their trading decisions.

They earn income through commissions or fees agreed upon with clients, based on the transaction value.