Commission House

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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.

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RELATED FAQS
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    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
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