Best brokers for futures of July 2024
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Updated 6:38 p.m. UTC Feb. 21, 2024
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Like stocks, futures are traded on an exchange. They can track underlying assets, including commodities like oil, precious metals like gold, agricultural products like soybeans, financial instruments like stock indexes, bonds and currencies, or even cryptocurrencies like bitcoin.
“A good futures broker should provide their clients with expertise, excellent customer support, low fees and an easy-to-use, intuitive trading platform,” said Sam Boughedda, equities trader and writer at AskTraders.com.
To find the best brokerage for futures trading in 2024, our ranking considered factors such as fees, trading platform capabilities, customer service and educational resources offered.
NinjaTrader
Best online brokers for futures
E*TRADE from Morgan Stanley
Charles Schwab
tastytrade
TradeStation
Compare the best brokers for futures
| Broker | Futures commission open fee | Futures commission close fee | Account minimum |
|---|---|---|---|
Interactive Brokers
| $0.85
| $0.85
| $0
|
E*TRADE from Morgan Stanley
| $1.50
| $1.50
| $0
|
Charles Schwab
| $2.25
| $2.25
| $0
|
tastytrade
| $1.25
| $1.25
| $0
|
TradeStation
| $1.50
| $1.50
| $0
|
Methodology
We have reviewed and researched some of the largest online brokerages in the U.S. to rank the best available today.
For our rankings, we sent a digital survey of more than 70 queries to each company we reviewed. Our researchers verified the survey data and confirmed any missing data points by contacting each company directly and via online research.
Among all the brokerages considered, the six that made our list excelled in areas across 10 major categories (with weightings): range of offerings, trading costs, account minimums and fees, features, advisory services, insurance, customer service, education/research, security, margin interest rates and cash interest, and portfolio analysis.
- Within each major category, we considered several subcategories, combining them to give an overall score for that category which we then weighted to calculate an overall ranking of the brokerages.
- Data points were scored on a 0.00 to 1.00 scale. The top raw score was 0.79, curved to a 5-star rating as the highest possible score.
The insurance category reviewed whether the brokerage has Federal Deposit Insurance Corp. and Securities Investor Protection Corp. protections, additional asset protections, and additional insurance.
Why other online brokers didn’t make the cut
Futures traders have a unique set of needs for brokerages: a combination of low fees, a wide range of offerings, and strong research and analysis capabilities.
Fees played a large role in the rankings. We eliminated brokerages with higher-than-average per-contract fees or less transparent fee structures for futures trades.
The range of offerings played an important role too. Brokerages offering exposure to various futures types across many markets and geographies scored higher. These firms offer greater versatility and flexibility for futures traders.
Futures traders are highly active, making many trades a day. An ideal brokerage must have strong charting, technical analysis and research capabilities to support this. Additional value-added services like paper trading simulators and heat mapping can help futures traders achieve their objectives.
We are also focused on firms with more extensive customer service support capabilities, especially those that offer 24/7 access. This is important, given that futures trade 24 hours a day, six days a week, and traders may benefit from access to professional help when they need it.
Finally, our rankings considered some accessibility factors general to all brokerages — not just for futures. This included account minimums, inactivity fees, margin interest rates, account transfer or closure fees, and wire transfer fees.
Final verdict
Futures trading offers a unique avenue for retail investors to speculate and hedge risk. Our rankings put Interactive Brokers at the top of the list of the best overall brokerages for futures trading, thanks to a combination of competitive fees and a range of offerings.
Regarding fees, investors can save significantly depending on their volume by opting for Interactive Brokers’ fixed-rate or volume-tiered pricing. The breadth of offerings covers futures and futures options from several exchanges in North America, Europe and Asia Pacific across agriculture, currency, energy, equity index, fixed-income, metals and volatility types.
Finally, Interactive Brokers offers various value-added features, including specialized futures trading tools, a U.S. futures market scanner, daily futures arbitrage and interest rate tables, and various futures webinars from Traders’ University.
Types of futures contracts that you can trade
The types of futures contracts you can trade depend on the specific brokerage. Investors can generally find futures contracts for energy commodities, precious metals, agricultural products, stock indexes, interest rates, volatility, bonds, currencies and even cryptocurrencies. Here are a few types and some of the products they feature:
Energy commodities
- Crude oil. Contract examples include West Texas Intermediate and Brent Crude.
- Natural gas. Henry Hub Natural Gas futures.
- Gasoline. Reformulated Gasoline Blendstock for Oxygenate Blending, or RBOB, futures.
Precious and base metals
- Gold. Standard gold futures, which is often seen as a safe-haven asset.
- Silver. Often traded for both industrial demand and investment purposes.
- Copper. Used in a significant number of industrial applications, including electrification.
Agricultural products
- Corn. A staple crop with widespread use in food and ethanol.
- Soybeans. Used in food products, animal feed and biofuels.
- Wheat. Essential for global food supply, with various grades traded.
- Cattle and pork. Commonly traded meat commodities.
Stock indexes
- S&P 500 index futures. Reflects the performance of large-cap U.S. stocks.
- Nasdaq-100 futures. Based on the Nasdaq-100 index, representing technology and non-financial companies.
- Dow Jones Industrial Average futures. Tracks 30 price-weighted, large publicly-owned companies in the U.S.
Interest rates
- Federal funds rate futures. Financial contracts based on the anticipated Federal Funds Rate, the rate for overnight interbank lending. These futures price market expectations of Federal Reserve monetary policy changes.
Volatility
- VIX futures. Based on the Chicago Board Options Exchange’s volatility index (VIX), representing market expectations of near-term volatility.
Bonds
- Government bonds. Futures on government-issued bonds like U.S. Treasurys across various maturities.
Currencies
- Major currency pairs. Includes futures for EUR/USD, GBP/USD and USD/JPY, among others.
Cryptocurrencies
- Bitcoin futures. The most widely traded cryptocurrency futures.
- Ethereum futures. Derivatives for the second largest cryptocurrency by market capitalization, used in a variety of decentralized finance applications.
The availability of these types of futures contracts depends on the specific brokerage.
Frequently asked questions (FAQs)
According to our rankings, Interactive Brokers stands out for having the lowest fees for futures trading.
Interactive Brokers offers highly competitive commissions, charging only $0.85 per contract for opening a position and an identical $0.85 for closing it, with a monthly trading volume under $1,000. Additionally, Interactive Brokers doesn’t impose any account minimums, making it an accessible option for a wide range of traders looking for cost-effective futures trading solutions.
No, not all brokerages offer futures trading. This type of trading, known for its complexity and potentially higher costs, is not universally available across all platforms. In particular, brokerages that cater to beginner investors or those focused on buy-and-hold investment strategies may not include futures trading in their offerings.
This is often due to the specialized nature of futures markets and the need for more advanced trading tools and risk management strategies, which might not align with the services or expertise sought by novices or long-term investors.
Data suggests that a significant majority of retail traders, in general, do not achieve profitability. This doesn’t mean profitability in futures trading is unattainable; rather, it highlights that the odds are stacked against traders from the outset.
One of the primary challenges faced by many retail traders is the lack of adequate risk management. Effective risk management is crucial in the volatile world of futures trading.
Additionally, the futures market is inherently competitive, and retail traders are often up against highly experienced and well-capitalized institutions and professional traders. These professionals have not only better tools and more information but also the experience and discipline that come with years of trading, making it a challenging environment for less experienced retail traders.
The amount of money you need to trade futures depends on the type of future you’re trading. Different futures contracts have varying margin requirements, which are set by the exchanges and can also be influenced by your brokerage’s policies.
To illustrate, let’s take the E-mini S&P 500, which is among the more popular and accessible contracts for retail futures traders.
For instance, if the S&P 500 index is at 4,700, and assuming the E-mini contract has a multiplier of $50 (which is standard), the value of one E-mini S&P 500 contract would be 4,700 x $50 = $235,000.
However, you don’t need the full value of the contract to trade. Futures are traded on margin, meaning you only need to put up a fraction of the contract’s total value. This is known as the initial margin requirement.
For E-mini S&P futures, this margin requirement can be quite low compared to the contract’s value. For example, if the initial margin requirement is set at 5%, you would need 5% of $235,000, which is $11,750, to hold one E-mini S&P 500 futures contract.
It’s important to remember that while lower margin requirements can increase accessibility, they also amplify potential gains and losses. Margin trading involves significant risk and can lead to losses that exceed your initial investment.
Additionally, margin requirements can change based on market volatility and other factors, so it’s essential to stay informed and manage your risk accordingly.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
