Futures trading has steadily gained more attention over the past few years so we decided to cover the best futures trading platforms on the market.
Futures markets offers investors an avenue to speculate on a variety of assets like stocks, indices, currency pairs, and commodities such as metals, crude oil, corn, grain, beef, and pork.
Well-known examples of futures markets include the Chicago Climate Futures Exchange, the New York Mercantile Exchange, the Minneapolis Grain Exchange, the Kansas City Board of Trade, the Chicago Board of Trade, and the Chicago Mercantile Exchange.
This article will explain what futures trading is and list the best futures trading platform for traders in 2019 with comprehensive reviews of their trading platforms.
What are stock futures?
A stock future is a contractual agreement between a buyer and a seller. The contractgives the buyer an obligation to buy a stock (and the seller an obligation to sell a stock) at a specified price at a future point in time.
An investor with an existing position in a stock, can use a future contract to minimize a loss or protect unrealized gain. For example, you can hedge a short portfolio with a long position.
What to look for in a futures plat in a platform for futures trading
- Commissions and margins: One of the most important considerations when choosing a futures brokerage is how their transaction fees and margins will affect you. Ask yourself whether the fees that a broker is charging in return for executing a trade are going to help or hurt you.
- Execution speed: Profitable futures trading requiresinvestors to look for brokerage firms that guarantee fast execution speeds to help the investors make the most of their trades.
- Trading and research tools: The trading platform that a broker is offering ought to give both beginning and expert traders the tools they need to successfully execute trades.
- Ease of use: When searching for a futures trading broker, always choose the one that has an easy understand user interface to help you minimize errors, which can hurt your trades.
- Client support: Last but not least, make sure that your broker is offering good customer support. Does the broker offer phone support? How about live chat service?
Best futures trading platform
With the aforementioned considerations in mind, here is our list of the best futures trading platforms for 2019.
- TradeStation– Competitive rates and great platform
- Interactive Brokers – Low commissions
- TD Ameritrade – Best platform for beginners
TradeStation
Originally targeted at high-end expert investors, TradeStation is a leading broker that facilitates stocks, ETFs, options, futures, bonds & fixed income, and mutual fund trades. It offers a variety of advanced features, which include:
- Powerful mobile, web and desktop platforms
- Round-the-clock phone support between Sunday 4:45 p.m. ET to Friday 6 p.m. ET
- Rapid execution speeds and real-time market data
- Impressive market-scanning tools
- Customizable charting
- More than 200 futures products
TradeStation’s education section is also well-structured and provides useful information to clients.
For futures, this broker requires its clients to maintain a minimum of $5,000 in their accounts. TradeStation’s margin rate is 25%-50% on select contracts and zero on most contracts.
* Commissions for futures traders using TradeStation
Fixed: $1.50 per contract in a single-tier account
- Less than 300 contracts: $1.20 fee
- 301-1,000 contracts: $1.00
- 1,001-10,000 contracts: $0.65
- 10,001-20,000 contracts: $0.45
- 20,000 contracts: $0.25
Interactive Brokers
Interactive Brokers (IBKR) was founded in 1977 by Hungarian-born American billionaire businessman Thomas Peterffy. The platform is popular for its universal portal, which allows clients trade stocks, options, ETFs, bonds, forex and futures in more than 120 markets across 31 countries.
IB is the biggest American-based online broker by volume of daily average revenue trades. However, it may not be a great choice for less active investors. This platform offers the following to futures traders:
- Low commissions
- Feature-rich mobile and desktop platforms
- Access to US and non-US futures markets
- Professional customer service
- Fast execution speeds
- Attractively low margin rates
- More than 200 futures products
- 24/7 phone, chat and email support
* Commissions for futures traders using Interactive Brokers
- 20,001+ contracts per month: $0.25 per contract, per side;
- 10,001-20,000 contracts per month: $0.45 per contract
- 1,001-10,000 contracts per month: $0.65 per contract
- 1,000 or less contracts per month: $0.85 + exchange and NFA fees
The minimum balance requirement for Interactive Brokers customers is zero. Interactive Brokers futures margin varies by contract; some 50%, select contracts 100%.
TD Ameritrade
TD Ameritrade has been in existence since 1975. Not only does this broker offer powerful and intuitive trading tools, but it is also one of the best platforms for beginners looking to give futures a try.
TD Ameritrade offers a top-notch trading platform for futures trading, called thinkorswim. This platform boasts a nearly endless number of features such as:
- Virtual trading capabilities targeted at novice traders
- More than 60 futures products
- Excellent data and research tools
- Free online education and seminars
- Backtesting
- 24/7 phone support
A $1,500 account minimum is required for you to trade futures in TD Ameritrade.
* Commissions for futures traders using TD Ameritrade
- $2.25 per contract, per side+ exchange and regulatory fees
TD Ameritrade is pricier compared with other brokers, and that can turn off some futures traders.
Final Thoughts
In order to succeed in futures trading, you need to use a broker that aligns with your investing goals. Picking the best futures broker that meets your needs can mean the difference between a frustrating disappointment and an exciting new income stream.
Whether you are a novice or an expert futures trader, all the brokerage firms mentioned highlighted in this article deserve your attention.