breaking news 5 Best Apps for Futures Trading • Benzinga
Incorporating futures into your trading strategy allows you to lock in pre-determined prices to buy or sell at a later date. This is a great way for you to protect yourself from market volatility and adverse price movements. But futures contracts involve risk. You can use futures trading for various assets, but you will need an advanced platform. With a lot of futures trading apps available, you might have a hard time determining the best one. Benzinga explores the best apps for trading futures and provides in-depth insights.
Quick Look: The Best Apps for Futures Trading
1. Interactive Brokers
Casual traders can take advantage of low margin rates and zero commissions for US stocks through Interactive Brokers (IBKR) Lite. Advanced traders will benefit from IBKR Pro, providing a price movement of $0.47 per 100 shares relative to the industry. The pro version offers a lower percentage for interest on idle cash balances and interest on margin loans than the lite version.
Besides futures, IBKR lets you trade foreign stocks, cryptocurrencies, options, bonds, and currencies. US investors can also trade spot gold. Institutions will find a panoply of tools to manage the funds.
You can earn interest for your fully paid shares. IBKR lends your shares to traders wishing to sell them short and pay loan interest. You can still trade your loaned shares without restrictions during your loan.
IBKR does not charge maintenance or inactivity fees and offers mutual funds with no transaction fees. It offers tier-based commission fees for futures contracts. If you have less than 1,000 contracts, you will pay $0.85 per contract. Traders with more than 20,000 contracts will pay $0.25 per contract.
The app provides many leading indicators and trading tools. However, it does not deliver stock alerts via push notification; it’s by email. Newbie traders may find the platform slightly intimidating as IBKR has designed it for advanced traders and sophisticated investors.
E*TRADE is a Morgan Stanley company that offers trading and retirement packages. You can trade futures on desktop and mobile devices using Power E*TRADE. It offers futures in eligible brokerages and IRAs.
E*TRADE has made available micro and e-mini contracts and charges $1.50 per contract on futures and options, excluding cryptocurrency futures. Novice traders will benefit from the knowledge base, teaching you everything from how to open an account to formulating a trading strategy.
The platform provides traders with over a hundred trading tools and advanced features for expert traders. In addition to futures, E*TRADE offers $0 trading in US stocks, ETFs, and options. You can also trade mutual funds and bonds and invest in new issues.
Navigating the website can be a bit confusing, as information such as the minimum balance to fund an account and how to close it can take you a while.
3. Charles Schwab
Charles Schwab offers traders a wide selection of assets. The design of the platform appeals to both beginners and advanced traders due to its $0 trading commissions and a large selection of mutual funds.
It provides extensive research tools to help you gain a great perspective on the futures market. Video tutorials are available from expert traders. You can trade futures, options and stocks in one window with the advanced order feature.
The support for futures contracts is excellent. Experts offer an assessment of your business or a strategy review. In addition to the extensive knowledge base, Charles Schwab offers 24/5 support. Another feature available is the automated cash sweep – it sweeps excess funds from the futures account into your brokerage account. Future contracts cost $2.25.
4. TD Ameritrade
Whether you are a beginner or advanced, you will find that TD Ameritrade meets your needs. It provides an easy to understand platform for beginners and advanced for expert traders. Apart from its great functionality, the TD Ameritrade platform has a $0 account minimum and offers $0 commissions on stocks, ETFs, and options online.
You can also trade currencies, mutual funds, bonds and CDs. TD Ameritrade offers a wealth of trading training, retirement planning options, and cash management products that help you avoid unnecessary fees.
The only thing that would make TD Ameritrade even better is if it offered fractional shares – owning less than a whole share of a company.
5. Trade Station
Expert traders will benefit the most from TradeStation’s FuturesPlus platform, which is specifically designed for futures options traders. Some of the features are custom strategy builders, price visualization and advanced contract analysis. TradeStation lets you trade gold futures, indices, crude oil, euro, and several other futures.
Although aimed at advanced traders, TradeStation’s platform aims to appeal to novice traders with commission-free trading in stocks, ETFs, and options. TradeStation charges mutual fund transactions and $1.50 per futures contract.
You can also trade cryptocurrencies, invest in your retirement, and get a share of emerging companies through IPOs. If you want to trade for free, you need to upgrade to the TS Select platform, requiring a minimum balance of $2,000.
Benefits of futures trading
Adding futures to your trading strategy allows you to benefit from them in several ways.
Allows you to diversify and cover: Futures trading allows you to minimize risk by diversifying. Predicting trends is difficult, which is why futures contracts allow you to avoid drastic price movements by guaranteeing a predetermined fixed price. This is particularly advantageous for businesses that transact in foreign currencies.
You can use an interest rate futures contract to lock in the price of an interest-bearing asset for a future date.
Futures markets are liquid: Markets trade futures contracts in large volumes six days a week. Trading extends beyond traditional hours and into the night, with some markets trading 24/7. Available buyers and sellers mean you can fulfill orders quickly and at any time.
The efficiency and volume of trading make futures contracts a liquid market. High liquidity helps to avoid drastic price volatility, especially for expiring contracts.
An investment with a high leverage effect: Traders open positions in the futures market with margins – an amount needed in an account, as a percentage of the value of a futures contract. The margin is usually a small percentage of the contract value, from 3% to 12%.
An exchange stipulates a margin so that traders use it as collateral if they suffer losses when prices negatively affect their positions. Using margin means you are exposing yourself to a larger position, which allows you to significantly increase your profits.
Allows speculation: The futures market allows traders to speculate on prices and counteract perceived movements by obtaining a fixed price. Prior to contract expiration, you can buy or sell an offsetting futures contract that eliminates losses from your current contract.
Execution costs are low: Most brokers charge low commission fees for futures trading. Some brokers even offer 0% commission on US stocks. The lower your fees, the more your investment can grow. But low fees do not guarantee profits.
Things to watch out for when trading futures contracts
Having the ability to speculate on future prices and counter them for profit can seem like a foolproof plan. But futures trading has risks and drawbacks, like all markets.
Leverage is risky: Most stockbrokers allow you to borrow up to 50% of the value of your position. The leverage available for futures trading can be as high as 95%. This means you are exposed to more risk.
Leverage increases your losses when the price trades against your position. Even small price movements can result in large losses. This situation could cause the broker to force you to liquidate your position.
It is possible to suffer greater losses than your investment with leverage, triggering a margin call – a broker asks you to deposit money to reach the minimum value.
Large margin deposit: Investors with limited funds may not qualify for futures trading. The Financial Industry Regulatory Authority (FINRA) requires you to deposit at least $2,000 in a brokerage account. Although margins are a percentage of the contract value, an S&P 500 e-mini contract requires you to deposit several thousand dollars.
Compare futures brokers
Choosing the right broker to trade futures contracts requires you to analyze several key factors. Benzinga has made this easier by reviewing and providing information on the best online broker.
Claim exclusive offers
Advanced futures trading
Non-US mobile users
79% of retail investor accounts lose money when trading CFDs with this provider. You need to ask yourself if you can afford to take the high risk of losing your money.
High Volume Traders
High Volume Traders
Low deposit requirement
Trading Micro Futures
Frequently Asked Questions
How to trade futures contracts successfully?
Risk management is the first step to successful trading. Because futures markets allow leverage, traders can suffer significant losses – minimize your leverage. Mastering the psychology of trading is crucial to avoid making hasty decisions that you will regret. Learn several trading strategies and integrate indicators. Avoid the trap of over-trading to maximize profits or offset losses. Choose a reputable broker that offers reliable service e-commerce app.
Are futures contracts riskier than stocks?
No. The risk associated with any financial market depends on your risk management. Good traders know that placing stop losses, minimizing leverage and avoiding emotional trading gives the greatest likelihood of success. A trader determines the preferred level of risk in all markets.
What are the best apps for futures trading?
Check out Benzinga’s list of the best apps for futures trading in the article above.