The 4 Best Futures Trading Platforms
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The 4 Best Futures Trading Platforms

The 4 Best Futures Trading Platforms

Futures, which were originally designed to help commodity producers hedge production risks, are a helpful trading tool available to all traders across a wide range of asset classes. Futures are highly leveraged, although only a small portion of the entire value of positions must be posted as margin.

As a result, futures trading can provide huge profits and losses in comparison to the capital required to build and maintain a position. Thus, understanding the potential hazards is crucial. We have reviewed the finest futures trading platforms and brokers to help you decide which are ideal for your trading needs.

Best Futures Trading Platforms of 2024

  • Best for Futures Education: E*TRADE
  • Best for Professional Futures Traders: Interactive Brokers
  • Best for Desktop Futures Trading: TradeStation
  • Best for Dedicated Futures Traders: NinjaTrader

1. E*TRADE

Account minimum: $0

Commission: $1.50 per contract, per side (cryptocurrency futures $2.50 per contract per side) Additional fees may apply for exchange, clearing, and NFA.

Why We Chose It

We chose E*TRADE as the top broker for futures education because the platform provides substantial material and training resources to assist educate and prepare investors to trade and invest for themselves, including valuable futures-specific content.

Pros

  • Support for a variety of US asset classes
  • Easy-to-use platforms
  • Excellent instructional resources and information.
  • Demo account for paper trading.
  • CME Group and CFE statistics are free for non-professionals.

Cons

  • No access to foreign exchanges.
  • Increased margin rates for IRA accounts

Overview

E*TRADE, one of the first internet brokers, launched in 1982 and was acquired by Morgan Stanley in 2020. The organization has consistently innovated and updated its platforms to reflect current trends. While E*TRADE is best recognized for its retail brokerage services for customers who manage their accounts, it now allows futures trading. The company’s sophisticated platform, which consolidates numerous US asset classes, appeals to both new and seasoned traders.

While skilled traders may choose online futures brokers with greater features, E*TRADE’s website offers a reliable futures trading experience. E*TRADE provides user-friendly desktop, web, and two mobile platforms, particularly given the amount of content available for trading and learning about markets.

E*TRADE futures trading requires a margin of 50% for day trades and 100% for overnight holdings. Day trading futures in individual retirement accounts (IRAs) require a 100% margin, whereas overnight positions demand a 200% margin. While E*TRADE’s futures commission rates are higher than those of other brokers that specialize in futures trading, many consumers will appreciate the ability to add futures trading capabilities to their current E*TRADE account.

E*TRADE’s futures page, as expected, includes information on available markets and commissions, but it also includes articles such as “Five reasons why traders use futures,” “How can I diversify my portfolio with futures?” and “How do I manage risk in my portfolio using futures?,” as well as a link to E*TRADE’s information library. These articles provide rookie futures traders with additional useful information, such as expiration and settlement dates.

2. Interactive Brokers

Account Minimum: $0.
Commissions range from $0.25 to $2.50 per contract ($5 for crypto futures), with IBKR Pro customers paying on a tiered scale based on volume and IBKR Lite paying a set rate.

For typical futures contracts, IBKR Lite users pay $0.85 per contract. $0.25 per mini-contract. Cryptocurrency futures range from $0.10 to $5 per contract. E-mini FX futures cost $0.50 per contract.

IBKR Pro users pay between $0.85 and $0.25 each contract (depending on volume). Mini contracts cost $0.25 to $0.10 per contract.

Cryptocurrency futures range from $0.10 to $5 per contract. E-mini FX futures trade at $0.50 to $0.05 per contract. IBKR Pro customers are also charged an overnight position fee.

The minimum margin for intraday positions is $50.
Standard exchange and regulatory fees apply.

Why We Chose It

Interactive Brokers (IBKR) is our top option not only for professional futures traders, but also for professional, advanced, and international traders. This is because IBKR provides more markets for trading on a single platform than any other broker. Furthermore, IBKR’s trading technology is among the top of all online brokers.

Pros

  • Most markets are offered on a single platform.
  • Backtesting of Strategies
  • Complex and automatic trading strategies
  • Low commissions for high-volume traders.

Cons

  • Can be frightening for less experienced traders.

Overview

Interactive Brokers was established in 1978 and was the first company to employ a hand-held computing device on an exchange floor. Since its start, the company has sought to provide its consumers with the most advanced and sophisticated trading tools available. Historically, the company has catered to the world’s largest international traders, who want a single platform that can manage deals in several markets utilizing various trading vehicles.

While IBKR has developed tools to appeal to less knowledgeable traders, such as IBKR Lite, which offers commission-free stock trading, the company is still developing complex features for its professional trading clientele. IBKR accepts customers from all over the world, which is something not all brokers do.

IBKR’s advanced features include the ability to backtest trading ideas, complex options analysis tools, and a diverse set of order mechanisms, including one-cancels-other (OCO) and a slew of conditional orders. In addition to these drop-down order entry tools, IBKR enables users to create their trading algorithms using a wide range of fundamental and technical indicators. Traders can create automated entry and trade management instructions for trading any market, including futures. Furthermore, IBKR provides exceptional order execution, including the ability to route equity orders. IBKR’s Adaptive Algo can also be applied to futures to determine the optimum execution of a market order.

When it comes to futures trading, IBKR is designed for larger traders. This isn’t simply in terms of volume discounts, which begin after 1,000 contracts. IBKR also requires greater margins than other brokers.

This serves as a risk management strategy, guaranteeing that you can withstand a 1% to 2% fluctuation in the underlying stock price. This is again another clear indication that IBKR is intended for larger professional traders.

3. TradeStation

The account minimum is $0 and the commission is $1.50 a trade per side, plus NFA, exchange, and overnight position costs. Micro futures have a fee of $0.50 per trade.

Why We Chose It

TradeStation is our top choice for desktop futures traders due to its extensive interface, which includes outstanding charting, order entry, and position management capabilities, as well as moderate margin rates.

Pros

  • Fast platform with excellent execution.
  • Support for several asset classes.
  • simulated trading
  • Advanced order types and trade automation
  • Free data for non-market professionals.

Cons

  • A steep learning curve
  • Weak customer service

Overview

TradeStation, which was founded in Florida in 1982, is geared toward more advanced traders. The platform provides outstanding charting, analytics, and trade administration features, such as order routing control and complex order capabilities.

TradeStation’s commission costs for futures trading are fairly competitive at $1.50 per side. In addition, intraday futures traders benefit from cheaper margin rates.

Although the platform may take some time to understand, it is generally intuitive for experienced traders. Other platform features include simulated trading, which allows consumers to become acquainted with the system, as well as futures trading before committing to real funds.

TradeStation allows you to trade a variety of asset classes, including stocks, ETFs, cryptocurrencies, options, futures, and futures options. TradeStation provides non-professionals with free data for all of these marketplaces. We discovered that TradeStation’s customer service did not rank as high as other futures brokers. We chose TradeStation as our favorite desktop platform for the future because of its extensive backtesting and data availability.

4. NinjaTrader

Account Minimum: $0 to open an account; $50 minimum margin for trading.

Commission: Option 1 – Free: There is no monthly cost, and per-side commissions are $0.35 for micro-futures contracts and $1.29 for normal contracts. Option 2 – Monthly: A monthly charge of $99, with per-side commissions of $0.25 for micro contracts and $0.99 for normal contracts. Option 3 – Lifetime: $1,499 one-time payment, with per-side commissions of $0.09 for micro contracts and $0.59 for normal contracts. For all plans, exchange, clearing, and National Futures Association (NFA) fees apply.

Why We Chose It

NinjaTrader was chosen as the finest platform for committed futures traders because it provides a variety of low-cost pricing options, low-margin rates, and access to powerful desktop, online, and mobile platforms that allow for direct trading from configurable charts.

Pros

  • Very low intraday commissions.
  • Integrated desktop, web, and mobile platforms.
  • Excellent Charting
  • 24-hour support during the trading week.
  • Simulation provides for risk-free trading practice.

Cons

  • No option or equity trading (with a caveat).
  • Market data purchase is necessary.

Overview

NinjaTrader was founded in 2003 to serve active self-directed futures traders. NinjaTrader launched new cloud-based, mobile, and online platforms in March 2023, enabling smooth trading across all platforms. In January 2023, the company unveiled a custom-built trading tool to accommodate event-driven futures.

NinjaTrader platforms are free to use, and you can mimic trading without needing to fund your account. The software provides superb, configurable graphing and real-time analysis. It also allows trading directly from charts. Furthermore, the platform supports many apps and third-party add-ons.

NinjaTrader’s margin is aggressive, with a $50 intraday margin on equities index E-mini futures and only $500 for conventional futures contracts. NinjaTrader sets intraday margins at four times regular rates for new trades opened 15 minutes before and five minutes following major economic data releases.

The low intraday margin is a major reason we chose NinjaTrader as our top broker for devoted futures traders, as other futures brokers charge hefty initial and maintenance margins on all futures contracts. NinjaTrader only applies these larger initial and maintenance margins to positions held overnight, which is extremely tempting to active traders.

While the platform does not enable stock or options trading on equities or futures, these markets can be traded through the NinjaTrader platform using APIs from other brokers, notably Interactive Brokers. Foreign exchange trading can also be done using pass-throughs to FXCM. However, live futures trading on NinjaTrader requires a data subscription, which, while modest, adds another cost to the trader. Finally, we like how NinjaTrader provides 24-hour help during the trading week.

The Final Verdict

While there are numerous futures trading platforms available, the ideal one for you is determined by your trading style. NinjaTrader has very low commissions (particularly for intraday trading), a stable platform with strong execution, and the flexibility to connect to other trading platforms via third-party apps and APIs. Professional and high-volume traders will select Interactive Brokers since it offers the broadest market coverage and volume savings.

Investors who primarily trade equities but want to be able to trade or hedge with futures can select platforms such as E*TRADE, which have outstanding all-around platforms and solid educational content. Finally, TradeStation will appeal to futures traders with moderate futures trading volume who also trade other asset classes such as stocks, ETFs, and options and require advanced order options and control over order routing for equities.

What Are Futures Contracts?

Futures are legal contracts that require the purchase or sale of a defined amount of a good at a specific time. While futures were originally designed for agricultural commodities like wheat and maize, they today include a wide range of commodities and financial assets, including grains, livestock, currencies, oil, gas, and interest rates. Futures contracts include parameters for the quality and quantity of the commodity underlying the contract, such as delivery requirements, time and manner of delivery, and minimum price increment.

Futures contracts allow for various delivery months. Not all futures contracts have a physical delivery process; instead, they settle for cash at maturity; this is characteristic of financial futures, although agricultural products often have physical delivery systems.

Another essential aspect of futures is leverage, which requires only a small portion of the total value of a contract as a margin to begin a trade. Unlike the margin for stocks, which is limited to 50% for overnight holdings and requires the customer to pay interest to the broker, the margin for futures is the posting of funds determined by exchanges to ensure that financial obligations on their positions are met.

Futures margins, which comprise initial and maintenance margins, are typically a much smaller percentage of the contract’s total value than trading equities. Futures holdings, like equities traded on margin, will be stopped by the broker or exchange if sufficient margin is not maintained. Margin on futures provides traders with even more opportunity and risk, resulting in higher leveraged profits or losses on their bets.

How Futures Trading Works

Futures are used for both hedging and speculation. Futures, which were originally developed by farmers and food processors, provide producers more influence over the prices they receive or the prices processors pay for crops. Futures contracts are agreements to acquire or sell a specific amount of a commodity at a specific time and price. Futures contracts, as a result, have predefined parameters for contract size, quality and location of the item to be supplied, and delivery date.

In addition to producers and processors using futures contracts to mitigate price risk, some speculators have no direct relationship to the product being traded. Speculators trade futures for profit but do not intend to take delivery of the underlying commodity. Speculators help to increase liquidity in the futures market. The futures market has expanded far beyond agricultural products, with futures covering energy, precious metals, and financial assets such as currencies, interest rates, and equities indexes.

Financial futures are also effective hedging and speculation tools that can assist traders manage risk in their stock and bond portfolios. For example, someone with a stock portfolio who does not want to sell stocks but feels the market will collapse can choose to hedge their portfolio by selling futures rather than selling appreciated stock holdings, which would require them to pay capital gains on a long-term investment.

How Do You Start Trading Futures?

It is relatively simple to trade futures. The method is comparable to opening a margin account to trade equities. First, a customer selects a broker to establish a futures trading account. A futures trading account can be opened with an existing broker who supports futures trading, or with a new futures broker. The account opening process consists of signing a margin agreement, having the account approved by the broker, and depositing funds into the account. Some brokerage accounts need a minimum balance of several thousand dollars to permit margin.

How Much Money Do You Need to Trade Futures?

While futures markets have substantially more margin leverage than US stocks, futures traders should have more cash in their accounts than just the initial margin requirements. Futures traders should keep at least $10,000 in their accounts, but much more is strongly advised for individuals who would hold positions overnight. This is to ensure that you are not left out of market volatility. Margin rates are defined for each particular market being traded and are determined by the overall risk based on contract value and market volatility for the futures contract in question.

What Hours Can I Trade Futures?

Trading hours vary for each futures contract, although they have generally increased in recent years as electronic trading has grown. Futures on the S& P and US Treasuries, for example, are almost continuous because these markets are only closed for trading from 5 p.m. to 6 p.m. ET every day of the week; trading begins on Sunday at 6 p.m. and ends on Friday at 5 p.m. Grains, on the other hand, have limited trading hours, with trades taking place daily from 8 p.m. to 2:20 p.m. ET, beginning on Sunday evening and ending Friday afternoon.

What Is the Commodities Futures Trading Commission (CFTC)?

The Commodities Futures Trading Commission (CFTC) is an independent organization that oversees all derivatives contracts in the United States, such as futures, options, and swaps. Congress established it in 1974. The CFTC works to guarantee that US derivatives markets are efficient, orderly, fair, and free of fraud.

What is the best platform for trading futures?

  • Tastytrade caters to serious futures traders.
  • Interactive Brokers cater to active and experienced futures traders.
  • TradeStation is ideal for futures traders concerned with costs and account minimums.
  • Futures traders looking for a strong all-around investment platform may choose Charles Schwab.

What is the best site to learn futures trading?

Learn futures trading and earn certificates with premium and free online courses from edX, Udemy, YouTube, and other leading learning platforms worldwide.

Methodology

Futures trading is best suited for experienced market players because it carries a disproportionate degree of risk when compared to other trading vehicles. We evaluated six of the best online brokers and platforms for futures trading based on execution quality, trading technology, available asset classes, customization, costs, convenience of use, education, and mobile trading capabilities.

 

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