Commission House

DEFINITION of 'Commission House'

A brokerage or merchant firm which buys and sells futures contracts for customer accounts. A commission house generates income by charging a commission on the transactions that are made on behalf of the customers. Also known as a Futures Commission Merchant (FCM).

BREAKING DOWN 'Commission House'

Services might include transactions such as buying and selling bonds, stocks or commodities. More specifically, a commission house gets paid for executing orders, arranging settlement, or servicing margin accounts on behalf of their clients. They typically use omnibus accounts to do this.

RELATED TERMS
  1. Futures Commission Merchant - FCM

    A merchant involved in the solicitation or acceptance of commodity ...
  2. Omnibus Account

    An account between two futures merchants (brokers). It involves ...
  3. Merchant Agreement

    A contract between a business and a credit card service provider.
  4. Merchant Account

    A type of business bank account that allows a business to accept ...
  5. Processing Date

    The month, day and year when a merchant’s bank processes a credit ...
  6. Purchase And Sale Statement - P&S

    A statement communicating adjustments or transactions affecting ...
Related Articles
  1. Economics

    What Does a Merchant Bank Do?

    A merchant bank is a financial institution that performs underwriting, loan services, financial advising and fund raising services to large corporations.
  2. Trading Systems & Software

    Broker Guide To Forex.com: Introduction

    Forex.com is an online foreign exchange brokerage that is owned and operated by GAIN Capital Holdings Inc. - a publicly traded company in the United States. With over 350,000 customers in more ...
  3. Home & Auto

    How Real Estate Agents Get Paid

    Most real estate agents are paid a percentage of the property’s selling price, which is called a commission.
  4. Savings

    WePay vs. PayPal Fees

    WePay and Paypal facilitate payments between businesses and people. Which one should you go with?
  5. Trading Systems & Software

    Broker Guide To Forex.com

    As one of the largest retail forex brokers based in the U.S. Forex.com offers forex traders a reliable, transparent, and high-quality platform.
  6. Investing

    The Most Expensive Brokerage Accounts For Traders

    A peek into the brokers whose brokerage charges are higher than average in the stock market world.
  7. Brokers

    TD Ameritrade Thinkorswim: Commission Structure

    By Cory Mitchell When using the thinkorswim trading platform, fees fall under the "Internet" category and are cheaper than the fees charged by TD Ameritrade if making a trade by phone or with ...
  8. Trading Systems & Software

    Charles Schwab Broker Summary: Services And Commission / Fee Structure

    Schwab offers the full regular range of investment and trading options to clients. Schwab clients can place orders for stocks, bonds, mutual funds and options either online, by phone or with ...
  9. Retirement

    Advisors Fees: What Are You Paying For?

    Fees or commissions? Which is best? Either way, what matters most is that the investor is aware of each charge and how if impacts their portfolio.
  10. Trading Systems & Software

    Broker Summary - Interactive Brokers: Account Types And Minimum Deposits

    Interactive Brokers offers customer accounts for individuals, families and small businesses. In addition, IB offers a variety of customer account structures to meet the specific needs of institutions, ...
RELATED FAQS
  1. How much money do I need to start trading?

    The step toward becoming an active trader is a big one, because the world of active trading is quite different from that ... Read Answer >>
  2. What does the Daily Average Revenue Trade (DART) tell me about a brokerage?

    A decline in a brokerage firm’s DARTs is not necessarily a cause for alarm, but you need to understand the factors behind ... Read Answer >>
  3. My FA recommended a wrap fee for me, is that appropriate?

  4. How are the interest charges calculated on my margin account?

    One way that investors borrow funds from brokerages is through margin accounts; it is these interest charges that allow them ... Read Answer >>
  5. How much will it cost me to become a casual investor on my own?

    Understanding the costs associated with becoming a casual investor is important if you want to be successful. It is important ... Read Answer >>
  6. When short selling a stock, how long does a short seller have before covering?

    There are no general rules regarding how long a short sale can last before being closed out. A short sale is a transaction ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center