Types of Memberships

Membership is an essential process and any commodity exchange can run only with members only. Members are business associate of exchange. Based on category of membership their role and responsibilities are varied.

Here memberships are divided mainly in 3 categories.

• 1.0 Market maker member: Market maker members (MM) are known as members who wish to take risk by injecting liquidity in market. Such members are designated to inject liquidity in exchange traded or managed instruments which are made available. MM is subject to rules and bye-laws while offering the quotes and they are not allowed to offer single side quote only. MM must offer 2 side quotes i.e. bid and offer simultaneously and should be within the defined range of exchange. MM can trade on their own account and can introduce trading member to exchange.
• 2.0 Introductory Broker (IB) member: IB members act as introductory brokerage firm. They mainly deal with customers who wish to take part on trading. Trading members can act as advisory, facilitator to customer and dealing with customers. Trading members are root pillar of business in exchange system as they are main root to generate business in system.
• 3.0 Institutional Member: Institutional Members mainly they trade on their own account and cant facilitate trading for customers. Such membership is beneficial for large companies who wish to utilize this market for hedging needs fulfillment.
• 4.0 Individual Member: such category membership is exclusively for high net-worth individuals who wish to minimize risk on their physical holdings and wish to utilize market for hedging needs only.