Which Brokers Are Best for Futures Trading?

Best Futures Brokers

• When searching for the best futures brokers several things that should be taken into account. Every futures trader is different. Fortunately, every brokerage is different in some ways too. So you are sure to find one that bests matches your needs. You must also remember that your needs will change over time. Therefore, the qualities, services, and fees of a brokerage do as well.

Thus, the brokerage that you choose today may not be what you need a year from now or in 5 years. Therefore, it’s beneficial to look at the offerings of different brokers regularly and be willing to change as needed. 

The following categories will help you determine which brokerages fit your specific needs. Some will be more important than others.

And this can help you quickly determine which service is best for you. We’ll even give you three great options. In fact, if you haven’t checked out our Futures trading course, then you should.

Here is an example of one of the best Futures brokers in Ninja Trader.

Fees, Commissions and Services

We all want the best deal we can get when it comes to the best Futures brokers. And this category is often the first deciding factor for a futures trader. There are four things to consider to help you decide what will be your lowest commissions and fees, for their services broker:

• How much you have to invest– Depending on the brokerage, you may get lower fees and trades the more money you have with them. Or the more total dollars of trades you are doing per month. This’s also something to consider over time as your portfolio grows. You may be better off switching.
• How much trading you’ll be doing- The more trades you perform, the more fees you will be paying in total. For someone that is a high-frequency trader, look for lower price/trade.
• The type of trading you will be doing- Different clearing firms have specialties in different futures markets. You should match your trading needs to the clearing firm’s core competencies. Some firms specialize in flat priced online futures trading. Others focus on broad access to all markets and futures. While others have the ability to get orders done in large sizes or illiquid markets. There are no firms that do everything or everything great. If you can find a broker with multiple clearing relationships and supply you with info about them, their benefits, and their service, you’ll be better served.

The Best Futures Brokers Offer Support

• How much support you’ll need- This category is broken up into a few sub sets. So look for the best Futures brokers that offer these things.
• Transactional or Relationship trader– If you just need the basics so that you can do trading, you are a transactional trader. If you’re in this group you have your own system to trade with and do research on your own. You’ll look for free or very low cost trades. If you need more information, research, and a high level of support, you are a relationship trader. The company for you will provide the support, resources(see reports below), and tools(see below) you need to be an effective trader.
• Hours of support- Depending on the type of trading you do will determine which company is the right choice. Futures markets are open 23.5 hours per day. Your trading hours and style may require 24-hour support; the more layers and options and response time for support the better. Look for a brokerage service with a dedicated futures broker, a trading desk, and an overnight desk for after-hours trading if needed.
• Futures Broker Support- Having a professional futures broker in your corner can be of great help when a high stakes situation arises. Say you’re on the wrong side of a limit up move. A support team can’t help. But an experienced futures broker that knows your account, can synthetically get you out of the positions by the close when others may be locked out. This is just one of their benefits and not a small feat; which may be worth the extra expense someday.  

Reports

Both technical and fundamental traders need reports and their research to help with trading.  Having both fundamental and technical analysis is useful along with news and report releases like the when US Fed meeting numbers or employment data comes out. The best Futures brokers offer this.

How Do I Choose a Futures Broker?

1. Picking the best Futures brokers can be overwhelming so look at these:
2. Tools
3. Reports
4. Support
5. Leverage
6. Execution
7. Commission fees

The Best Futures Brokers Tools

Superior technology, live quotes, and charts, as well as direct market access, are vital.  Add to this trade and info stability, speed, and reliability.  Knowing what platform is best for you and your trading style and which one the broker performs best at is critical.   Remember, if they only offer you one platform, that will be their best even if it is not that good.

Leverage

All brokers and clearing firms have the same overnight margin requirements, it is set by the exchange.  The difference comes with day trading margins.  A weaker risk management structure means they can’t monitor day traders, and they run the risk of incurring debts. 

Some firms will offer a 50% discount for day trading to traders that do not have margin calls at the close and will also let them trade with a 50% day margin.

Some brokers offer special rates for the E-mini S&P, like $500 day margins, which are a double-edged sword.  Leverage can boost returns quickly and wipe them out quickly.  Good futures brokers will allow access to $500 margins, but if the trader abuses the privilege or is reckless with the margin rules, the clearing firm can raise the day margin.  Transactional firms will let their clients trade regardless until they become a risk to the firms.

When it comes to leverage, the more used, the greater the risk.  Going from 50% reductions to 90% reductions grows risk exponentially.  FOREX companies have been forced they the CFTC to reduce their leverage available from 200:1 and even 400:1 to 10:1 as studies show that these leverage levels greatly increase complete wipeouts.

Ask a broker how risk is managed, how leverage is monitored, and the maximum leverage recommended as well as potential controls to prevent the maximum leverage levels.

Execution

Some brokerages will offer one, a selection, or all of the following execution services; make sure your needs are covered:

1. Self-directed online trading,
2. Broker-assisted
3. Options execution
4. Third-party/newsletter
5. Automated system or strategy
6. Managed

Which Futures Trading Platform Is Best?

1. NinjaTrader
2. Infinity Futures
3. Tradeovate

When looking for the best Futures brokers, you have to give these options a look. You can see below why we recommend them.

Infinity Futures 

They’re an overall established broker providing good service to many customers. In fact, they have competitive data, infrastructure, software, trading costs, quick order filling, and intraday margin trades.

Customer service is available and helpful but may not be the hand holder that some want. We consider them one of the best Futures brokers out there.

Tradeovate 

Tradeovate is a platform that provides other services as well. For example, they have a $250 minimum to open an account and a low cost for trading of micro and mini futures.  

However, they do require their traders to cover margins of futures following CMEG SPAN with a set consistent day margin price. They’re great for a new trader allowing you broad access. 

If you’re in our trade rooms, then you’ll see Signet is a huge fan of Tradeovate. They’re one of the best Futures brokers; especially for him.

Ninjatrader

They offer both software and brokerage services for active traders with free and premium services. The NinjaTrader SIM platform is free to use and free or with a funded account for charting, market analysis, and live trading.

For $60/month or a $1099 lifetime, the premium service includes automated trading, backtesting, advanced orders, and analysis of trading activity (volume bars, order flow, market depth)

If you’re in our Futures Trading room, then you’ll see Rose actively using them. It can help give you a better sense of one of the best Futures brokers out there.

Best Futures Brokers Summary

Remember, when you pick the best Futures brokers for you, you’re looking for an overall value. Review the considerations above.

Put them in order of importance and find a futures broker that fits your needs. As well as one that provides you the best value for your money.

You’re not going to find an ultra low cost and superior service broker. But you can find the balance that fits you. Good luck with all your trades.