The Best Futures Brokers
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The futures market is a popular but complex one. It is difficult to master and requires patience, strategic planning, and some guidance if you’re starting out.
Having the right broker to suit your trading style and experience is a crucial part of your success. That’s why we’ve listed the top 6 brokers based on their research and guidance, platforms and tools, and reputation for safety.
To help you get a better understanding of the market overall, its advantages and disadvantages, we’ve also included a short but informative guide below.
Best Futures Brokers – Reviews and Comparisons
1. IG – Best Overall and Most Trusted
Founded in 1974, IG has been a player in the forex game for nearly four and a half decades. IG has earned the top spot for many reasons, including its customer service, and educational material on offer.
Clients can utilize the company’s low-fees, accessible and easy-to-use platforms and tools, and a mobile trading app. In addition to being the best overall forex broker, IG has earned first place in our forex brokers review, too.
- Regulated by the Financial Conduct Authority (FCA), ASIC and CFTC, among others
- Minimum deposit of $250 in the U.S, if funding by debit card
- Competitive rates
- Over 16,000 markets
- Steep monthly inactivity fee after 2 years
- High stock CFD fees
IG is the largest company in the industry with a market value of over $1.3 billion. The company caters to over 178,000 clients globally, and is responsible for over 90% of transactions online – one million a month. The sheer scale of IG ensures that it can offer high quality services, products and low fees.
IG is regulated across the globe by several top-tier financial authorities. Regulators include: the Financial Conduct Authority (FCA) in the UK, the Commodity Futures Trading Commission in the US, the Australian Securities and Investment Commission (ASIC) in Australia, and BaFin and Deutsche Bundesbank in the EU. See our review of IG for more information about IG’s policies for citizens of different countries.
The firm offers traders over 16,000 investment products including forex, stock indices, stock sectors, equities cryptocurrencies, and bonds to name a few. Although IG reestablished itself in the U.S in 2019, U.S traders currently only have access to forex.
Fees for spread-bets and CFDs are mostly the same, and futures and options contracts can be traded on most instruments.
Futures and spot traders are looked after and can trade most commodities on the spot market or with futures contracts. Exotic and minor currency pairs and on offer, too.
A competitive rebate program gives an advantage to volume forex traders, while U.K traders can avail of discounts. Accounts are not tiered, with the exception of the retail and professional account option. Overall, account listings are above the industry average with institutional services, and an IG Smart Portfolio.
Crypto-traders can trade up to six cryptocurrencies but will be charged a high spread of 40-pips. Overall, IG is the best overall futures broker. Traders interested can create an account in 3 easy steps, while verification can take a couple of days.
2. CMC Markets – Superb Customer Service
CMC Markets is a relatively new futures broker to the game, founded as recently as 1989… or is that just my age showing? Okay, so, maybe “well-established” is a more suitable term.
None-the-less, CMC Markets is highly-regarded in the U.K, and is a leader for low cost trading. The brokers advanced platform, large range of bond listings, as well as five cryptocurrencies, create significant potential for trading opportunities.
- Competitive pricing
- Superb products and selection of products
- Considered safe, and is regulated by top-tier regulators including, the FCA
- No minimum to open an account
- No fixed spread accounts
- Limited security features
- No social trading platform
The firm’s highlights include their wide product range, advanced order types, competitive fees, and customer service.
If rates are a big factor in your decision making then CMC Markets could be your best option. The broker offers highly competitive pricing with a low with spreads as low as .7 pips and typical spreads of .81 pips.
Although high U.S index CFD spreads are charged, and no social/copy trading platform is provided which is a downside for those looking to learn from more advanced traders or even share your own ideas.
It is worth noting that CMC Markets is an execution-only broker which means that they are limited to perform executions only, without any guidance on the benefits, risks or their suitability for investments.
While this does mean they are an unsuitable option for traders who would need more guidance and support, their easy-to-use platform, educational material, and research tools are beginner friendly and will help any trader make the best decisions.
More active traders are offered liquidity rebates once you surpass $25 million per month in trading. Liquidity rebates can reach $10 per million. In addition, high-net-worth traders with $3k in commission spend or $2.5 million in holding can benefit from a VIP account, CMC Markets Alpha. Traders will be able to use the brokers detailed market research, mobile app and almost 10,000 tradable instruments.
Not only does CMC Markets offer low fees, and a good selection of products, its platform Next Generation is fast, and full of innovative tools and features suitable for both newbies and more advanced traders. Features include; charting, trading tools, news & insight, and order execution. The firm also offers traders the option of using the MetaTrader4 platform.
For those looking for a good customer support team, CMC Markets is top class. The team is accessible through a wide variety of options including 24 hour phone support, email, live chat and a detailed FAQs section.
Phone support is typically answered in good time, and the company boasts that 98% of calls are answered in under two minutes. Chat support is naturally that bit quicker, typically replying in less than one minute. Younger traders will appreciate the firms up-to-date Twitter and Facebook pages.
All together, CMC Markets is best suited not only to active traders, but newer and less skilled traders, too.
CMC is considered a safe and low risk broker for forex trading as it is publicly traded and regulated by several top class regulators including, the Investment Industry Regulatory Organisation, Australian Securities & Investment Commission (ASIC) and the Financial Conduct Authority (FCA).
Get instant access to a demo account for free before signing up to test out the platform, its features, and practice trading. You can then complete an application for a live account within minutes.
3. Saxo – Best Web Platform and Research
Saxo comes in at third place for the best forex broker, partially due to their award-winning platform, SaxoTraderGO, where traders can access 40,000 instruments to trade, hedge and invest from a single account.
Saxo is a leader in the forex industry, and aims to make trading and investing more accessible by offering one of the first online trading platforms and continuing to provide a top-class user experience and intuitive platforms to encourage and enable traders to take control of their finances and build a bright future.
- Award winning trading platform SaxoTraderPro
- Good reputation and transparent in its finances
- Superb research
- An ideal user-experience with an easy-to-navigate website layout
- Higher fees
- Customer support can be difficult to get a hold of
The forex broker also offers SaxoTraderPro, a professional ad full customizable trading platform, available on desktop, web and mobile. The firm has a good reputation and is transparent about their finances, regularly publishing key business figures and disclose their dealing practices.
Saxo Bank has created a platform with advanced trading tools, comprehensive account overview, innovative risk management features. The broker offers customers an easy to use website with educational material, news and research and you can see their SaxoStrats (the saxo strategy team), including Steen Jacobsen, Ole S. Hansen and John J. Hardy who offer traders expert advice.
Saxo has remained true to their word and offer customers a truly accessible user experience with access to over 30,000 markets, and advanced trading features, resulting in their high position on our list.
4. Forex.com – Great All Around, Low Cost
Forex.com is a global forex broker and was founded under 20 years ago, in 2001. The broker offers a great trading platform that both beginners and more advanced traders will enjoy.
The broker is considered safe because they are regulated in several countries, and has earned a good track record.
- Great desktop and mobile functions
- TradingView charts on platform
- Safe and regulated by top-tier regulators
- Higher spreads than competitors
- No protection for negative balances
- No cryptocurrency trading in the U.S
The firm offers futures traders educational material on trading hours, margin requirements, specification and order types.
The broker offers first-class online futures trading with a $50,000 simulated trading account, free and live exchange data feeds, and over 20 key features to assist your trading and fast execution.
Forex.com has transparent pricing, but offers several account types with different spreads and pricing making it hard to surmise as a whole. For example, one of their accounts will charge you the spread only, you can also pay a lower spread plus a fixed commission charge, or DMA.
Forex.com provide great phone support, and it is the quickest way to get a response. Their live chat is quick,only really get answers to the basics and their email support is relatively slow.
Overall, Forex.com is a good all round broker and is best suited to more advanced futures traders.
5. Oanda – Fantastic Selection of Currency Pairs
Oanda is a forex broker with 23 years experience in the industry, allowing futures traders to speculate on forex prices on their OANDA Trade platform and MT4.
The broker offers fast execution, no re-quotes and spreads starting from as low as 0.0 pips.
- Great trading software
- Considered safe and regulated by top-tier regulators
- Access to 71 currency pairs and a large selection of other asset classes
- No access to cryptocurrencies
- No negative-balance or slippage protection on accounts
- Slow response from customer service
Oanda’s FX platform was awarded the World’s Best Retail award in 2018 in the FX-Week e-FX Awards 2018 and offer 70 forex pairs, including all the majors and minors. The broker also offers MetaTrader 4.
Oanda offers futures traders a variety of powerful tools that will help you identify potential wins and create a strong strategy for trading. The firm offers partner APIs, including Advances Charts, Algo Labs and an MT4 plug in.
You can compare their accounts on Oanda.com and choose between a spread-only account option or check out if you qualify for a premium trading account to get set pricing plus commission.
Oanda’s low spreads will help you earn a profit with even minor market changes
Core Spread Vs Spread Only
Oanda does have a great reputation for customer satisfaction, is considered a safe broker, and is fully regulated, with offices in nine regions across the globe.
The brokers email support is on standby 24 hours, 7 days a week. You can also reach them on their live chat Monday to Friday from 1 pm to 6 pm ET, which just isn’t sufficient, and with that, they can be quite slow to respond.
6. TD Ameritrade – Excellent Trading Platform
TD Ameritrade is one of the biggest brokers in the industry with exceptional platforms for both beginners and more advanced and active traders.
The firm has recently been acquired by broker giant Charles Schwab after it introduced $0 commissions on online stock, ETFs, and option trades.
It does however charge a futures trading fee of $2.25 per contract that doesn’t include exchange and regulators fees.
- Detailed research on the futures market
- High-quality trading platforms.
- No account minimum.
- Accessible customer support
- Good investment selection
- Costly broker-assisted trades.
- Futures trading is $2.25 per contract (plus exchange and regulators fees)
TD Ameritrade’s futures products include metals, currency, grains, stock index, energy, softs, forest and live stock.
Futures traders will also benefit from the brokers futures news updates to help you stay current and informed at all times.
The broker’s TD Ameritrade Network hosts live daily TV programs through the day about futures education, market trends, trading ideas and insights.
The brokers show, Futures with Ben Lichtenstein, analyzes the latest updates on the futures markets to help you make the next best move.
TD Ameritrade now offers futures traders micro E-Mini Index futures to allow traders to enter at a lower cost, including lower margin requirements, and to offer customers more diverse portfolios.
Future traders will gain access to comprehensive education including, videos, webcasts and in-person events, and articles on a selection of futures topics, including Maximize Efficiency with Futures? A Capital Idea and Fun with Futures: Basics of Futures Contracts, Futures Trading.
TD Ameritrade has included a futures trading experience in their top class trading platform thinkorswim to help you manage your trades better. You can also access the mobile app, so you can trade wherever you are.
Futures traders can also use futures in an IRA account and options on futures in a brokerage account.
TD Ameritrade’s customer service is accessible on most social platforms, including Facebook, Twitter, Amazon’s Alexa and Apple Business chat.
The firms Ask Ted feature is a virtual investment consultant and offers customers a more real experience. Ask Ted is helpful and directs you towards the relevant information on the site. The broker also offers live chat on their Mobile Trader app.
A Short Guide to Futures Trading
What are Futures Trading?
A futures contract is an agreement to buy or sell an asset in the future, at a later date. It’s the opposite of the spot market which is when deals are settled immediately, or on the spot.
Futures contracts are good for assets that regularly change in value, such as oil.
If a company wants to protect itself against the unpredictability of changing oil prices, it will take out a futures contract to get oil delivered at a future date for an agreed price per barrel.
The futures market is a popular market for both companies who want to buy or sell commodities, and for speculative traders who want to profit from changing prices.
How Do Futures Work?
Let’s look at futures a bit closer. As mentioned, futures contracts allow you to buy or sell a commodity at a specific price per unit, on an agreed date.
We can use fuel for planes as an example of this. Airline companies will generally want to agree to a set fuel price so that they don’t have to deal with the hassle of it changing in value.
One way of doing this is through a futures contract, which states that they will get a specific amount delivered at a future date at a pre-agreed price.
Companies selling oil will favour futures contracts because it means that they can have a steady flow of sales, it also protects them if it decreases in value.
As a whole, this contract benefits and protects both parties from a price change in the wrong direction.
The contractual terms for a buyer of futures trades may be: To buy 40,000 barrels of fuel, for delivery on May 31st 2020, at $85.5 per barrel.
Futures: Beyond a Commodity
As you can see from the last section, commodities play a huge part of the futures market, but there’s more to it than just buying and selling goods.
You can also agree to a futures trade of individual stocks, shares of ETFs, bonds and even bitcoin.
Traders may choose to trade futures because it can give them a strong position without having to pay a lot of cash.
Investors may either buy an asset with the hope that it increases in value in the future, or short-sell with the hope that the price decreases later.
Futures are most commonly known for being used in the U.S stock market. If an investor speculates that a stock may rise in price in the future then they may buy a long contract, also known as a long position, or going long.
On the other hand, a trader who wants to protect itself from falling prices may short-sell a futures contract so that it can buy it back at a lower price later.
The trader will either make a profit, or a loss, based on the difference in price that they sold the futures contract for and bought it at again.
How Futures Change Bitcoin Prices
Bitcoin was launched in 2009 with a steady value of under $4,000 up until February 22, 2017 where it climbed exponentially to almost $20,000 before a rapid decline later that same year.
This 10 month peak has been notably connected to the introduction of bitcoin futures trading on the Chicago Mercantile Exchange (CME) and is consistent with trading behaviours.
This peak in February occurred the same day futures bitcoins started trading on the CME.
Bitcoin Price Dynamics: Late 2017 to Early 2018
Let’s begin by defining the two key kinds of demand that influence the price of a currency such as bitcoin: transactional and speculative.
Transactional demand occurs when bitcoin is used in transactions, such as buying goods or services, and speculative demand occurs when traders buy bitcoins in the hope that it will increase in price in the future.
For most currencies and assets, investors speculate an increase or decline in its value through several financial instruments related to the assets or currency itself.
Prior to December 2017, there was no market for bitcoin derivatives. This made it almost impossible to speculate on the changing value of bitcoin.
Traders generally speculate by short-selling which means to sell an asset before buying it, forward or futures contracts, swaps, or a mixture.
To bet on a price increase in bitcoin, investors just needed to buy it. As a sort of self-fulfilling prophecy, optimists who speculated that bitcoins price would increase were on the money up until December 17.
This demand for bitcoin made it more valuable which resulted in more people buying it and increasing its price.
Those who believed that bitcoin would collapse didn’t bet money to back this up, so it was a one sided game that ultimately resulted in a profound 10 month rise in the bitcoin price.
Futures options are a great way to start trading as they can be a low-risk introduction to the futures markets without going head first into futures contracts.
Buying options are not as risky or volatile as futures contracts and many traders solely trade options, but before you consider this, you should know the basics.
An option gives you the right, not the obligation, to buy or sell a futures contract at a strike price before a particular date.
When you buy options you can take either a long or short position and speculate on whether its value will increase or decrease.
While the contract gives the buyer the right, but not the obligation, to buy or sell the underlying asset, the seller of the option could become obligated to buy or sell the asset if the buyer exercises, or executes, the option.
If a trader thinks that the price of oil futures will increase over the next couple of months, they could buy an oil call option.
Call options are long positions, and are used when traders think the price will increase over a longer period of time, similar to an insurance policy.
An oil put option on the other hand, is similar to buying insurance in the belief that the asset will decrease in value. When traders buy options they are taking out insurance.
Buying options are low risk because when you buy one you can only lose the premium you pay. When you sell an option your earnings are limited to the premium you initially receive, but your losses are unlimited.
What is Intraday Futures Trading
Day trading is buying and selling a futures contract within the same day, so that all positions are closed before the market closes for that trading day.
The time between a trade’s opening and closing can be anywhere from a few minutes to the entire trading session.
This can be a very difficult trade to make successfully and should only be attempted by traders with a lot of experience who understand the market well.
Advantages of Day Trading Futures
As day trades close the same day they open, there is no risk at night. Price volatility, the value of an asset changing, is increased when positions are left open overnight.
If you want to get some experience in the futures market you can day trade as day traders tend to make several trades per day, day trading will give you some great experience in the futures market over a short period of time.
Downsides of Day Trading Futures
You need to be disciplined, calm, focused and strategic to win at day trading. The futures markets can suck some traders into a hole of either making small trades or too many trades.
Although you need to accept losses on some days, big wins should be more of a focus on key days.
You will need to have a lot of money to start with when day trading, be aware that commissions can add up fast and that most days may be a loss.
However, the key to success is to do your research, create a plan and adapt it and learn as you go.
How Does Futures Trading Differ From Stocks Futures Trading
Trading stocks and futures have some minor similarities but overall they’re quite different. You can also call a broker to buy or sell futures contracts, but the order is facilitated through a commodity exchange, such as the Chicago Merchantile Exchange.
Buying a stock will give you ownership over something, relative to the amount you paid, for example, you can buy a stock that will give to 1% ownership of a company.
When you buy a futures contract you’re entering into an agreement to receive a commodity at a certain price per on a date in the future.
Futures traders may never intend to own the commodity, just to sell the contract a profit if its value increases.
Futures contracts also imply that you will pay at a later date as stated on the contact, where as stocks are paid for immediately.
The Bottom Line
Overall, IG is our top pick overall for futures brokers, with Saxo coming in a close second.
That doesn’t mean you should discount the others. CMC Markets provide superb customer service, and Oanda is a good all rounder.
Both Forex.com and TD Ameritrade offer an exceptional trading platform, but Forex.com doesn’t trade cryptocurrency in the U.S.
Futures trading is a complex market, even for the most experienced traders, so make sure to check out the customer service and guidance a broker has to offer before you make your decision.