FCMs, introducing brokers etc

I use IB as my broker and that's the only broker I have ever known. As a result I seem to have glossed over some of the mechanics of how the whole futures scene operates. I'd appreciate some help with some terms I have come across recently.

So here goes:

1. What exactly is an FCM? I have found two possible forms: Futures Commission Merchant and Futures Clearing Merchant. I vaguely feel they are the claring people (or even more vaguely, the 'back-end' of my broker) but then how are they different from the clearinghouse of the exchange?

2. How is IB (my broker) different from an FCM? And when would one use FCM as opposed to a broker like IB?

3. Finally, what is an introducing broker, and when would one need one? How is IB (my broker) different from an introducing broker?

Thanks in advance.

 

IB's introduce customers to FCM

 

FCM means Futures Commission Merchant, it does not mean Futures Clearing Merchant. A FCM can be clearing or non-clearing.

Read all about FCMs and IBs at http://www.heritagewestfutures.com/commodity-futures-brokers.html

Interactive Brokers is a clearing FCM.

 

Thanks for that link.

So, IB (the broker) is an introducing broker and a clearing FCM rolled into one, would that be a correct statement?

Under what circumstances would one use a clearing FCM and a separate introducing broker? What are the considerations?