Best Brokers for Futures Trading in [year]

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Traders wishing to trade futures instead of spot instruments should know that there are Forex brokers offering trading in derivatives based on futures.

I’ve reviewed the Forex brokers offering futures to determine the pros and cons of each offering, with my shortlist of the best futures trading brokers listed below.

1
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Best all around broker
High floating leverage + fast execution
2
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
ECN-style trading
Daily market research and Autochartist access
3
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
High level regulation in multiple jurisdictions
Impressive range of tradeable assets including vanilla options and gold options
4
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Solid broker for scalping and hedging
Institutional-style trading opportunities for retail traders
5
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Most extensive crypto derivatives offering. Choice of 250+ Crypto CFDs
Multiple funding and swift withdrawal options
Ultra-low spreads across all Crypto derivatives

Best futures trading brokers 2021

  • FXTM, Best all-around broker with high floating leverage and fast execution.
  • FP Markets, ECN trading with leverage up to 1:500..
  • AvaTrade, Highly regulated, choice of fixed or floating spreads.
  • BlackBull Markets, Best ECN trading environment, with scalping and hedging.
  • Eightcap, Competitive pricing + excellent daily videos.

FXTM

5.0/5 in this category
In Summary
Best all-around broker with high floating leverage and fast execution

We have made FXTM one of our top-rated brokers because in addition to its lengthy track record, it enjoys a very high level of regulation and reputation, and it offers a highly competitive fee structure which tends to keep down the cost of trading.

Pros
  • Excellent commission-based Forex pricing environment and transparency

  • Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app

  • Quality market research and educational content for beginner traders

  • Proprietary copy trading platform, low minimum deposit, and high leverage

Cons
  • Limited choice of cryptocurrencies and commodities

FP Markets

5.0/5 in this category
In Summary
ECN trading with leverage up to 1:500.

fpmarkets is an ASIC-regulated Australian brokerage which launched in 2005. For most traders, the unique selling point of this broker is in the extremely wide range of tradable assets offered, providing the opportunity to trade over ten thousand individual stocks and shares including publicly quoted Hong Kong and Australian companies. Ffpmarkets also offers 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin. fpmarkets offers an unusual hybrid ECN/STP execution model, meaning their clients can choose between ECN style of execution giving a very high level of speed, and a “straight through processing” execution style which allows for more “natural” spreads.

FP Markets Pros & Cons

Pros
  • Choice of trading platforms and auxiliary trading tools

  • Very competitive cost structure and excellent asset selection

  • Low minimum deposit requirement and leverage of up to 1:500

  • Well-regulated and trustworthy

Cons
  • Availability of Iress geographically restricted

AvaTrade

4.5/5 in this category
In Summary
Highly regulated, choice of fixed or floating spreads

AvaTrade is one of the largest Forex / CFD brokers and well-known for offering their clients a choice of fixed or floating spreads. They have a very high and strong level of regulation. AvaTrade is directly regulated in Ireland (and by extension, the European Union), Australia, Japan, South Africa, and the British Virgin Islands. Outside the European Union, Ava offers maximum leverage on Forex currency pairs as high as 400 to 1. AvaTrade offers trading in over 55 different Forex currency pairs, 17 commodities, 20 equity indices, 14 cryptocurrencies, plus 66 individual stocks and shares. 2 bonds and 6 ETFs are also on the menu.

Pros
  • High-quality educational offering via SharpTrader

  • Excellent choice of trading platforms catering to various trading needs

  • Broad asset selection and cross-asset diversification opportunities

  • Well-regulated and trusted broker with oversight from a central bank

Cons
  • Trading costs competitive but nothing special

BlackBull Markets

4.5/5 in this category
In Summary
Best ECN trading environment, with scalping and hedging

BlackBull Markets was founded in 2014 in New Zealand. Like many antipodean Forex brokers, BlackBull Markets is an ECN broker, offering raw spreads and commissions. They are regulated in New Zealand by the Financial Services Providers Register (FSPR) and offer a maximum leverage on some Forex currency pairs as high as 500 to 1. In addition to their global headquarters in New Zealand, BlackBull Markets also has presences in the form of branch offices in New York and Malaysia. BlackBull Markets offers a relatively tight range of tradable assets: 27 Forex currency pairs and crosses, gold, silver, crude oil, natural gas, and 6 major equity indices. That should be sufficient for those traders with more focused strategies not requiring wide diversification.

BlackBull Markets Pros & Cons

Pros
  • ECN/NDD execution model with deep liquidity

  • Institution-grade pricing for retail traders via proprietary price aggregation

  • ZuluTrade and Myfxbook for social trading

  • Leverage of up to 1:500

Cons
  •  Limited deposit options

Eightcap

4.5/5 in this category
In Summary
Competitive pricing + excellent daily videos

Unique Features

Headquarters

Australia

Regulation

CySEC, FCA, ASIC, SCB

Year Founded

2009

Type of Broker

35,38

Minimum Deposit

$100

Maximum Leverage

1:500

Type of Platform

MetaTrader 4, MetaTrader 5, Trading View

Eightcap Pros & Cons

Pros
  • Low minimum deposit and high leverage of up to 1:500

  • Competitive cost structure

  • Excellent technology infrastructure and seasoned management team

  • Daily research and quality educational content

Cons
  • Limited leverage in some areas

AvaTrade

Irish-based AvaTrade established itself as a trustworthy CFD broker regulated in seven jurisdictions. Traders get six trading platforms and three social trading services, ensuring it meets a range of trading needs. AvaTrade offers many CFDs based on futures contracts covering commodities, indices, and bonds.

Since future contracts expire, AvaTrade automatically swaps an expired one with a new contract before expiration. AvaTrade then adjusts the price between both, ensuring uninterrupted trading. It is ideal for beginner traders who often miss expiry dates on futures contracts and fail to track them.

AvaTrade also offers leverage, which can range between 1:20 and 1:400, dependent on the jurisdiction of traders, classification of the account type, and traded asset. Beginner traders will benefit from the spun-out educational section of AvaTrade, SharpTrader, one of the highest quality educational tools.

FXTM

FXTM maintains a very competitive trading environments globally due to its low trading costs, high leverage, and upgraded MT4/MT5 trading platforms. FXTM offers many CFDs based on futures contracts covering commodities, indices, and bonds. The cost savings versus direct futures contracts, where spreads remain higher, is a factor traders must consider.

High-frequency traders and scalpers can benefit from the competitive, dynamic leverage FXTM provides. The minimum deposit of $500 for the FXTM Advantage account is higher than many brokers but well worth the trading costs, which rank among the best industry wide.

The educational platform at FXTM provides beginner traders with an introduction to trading, while FXTM Invest offers an interesting account management tool.

IFC Markets

Futures trades seeking the option to create synthetic trading instruments with a US patent-pending technology should consider IFC Markets. Catering to clients since 2006 from the British Virgin Islands, traders get the proprietary NetTradeX trading platform, alongside MT4/MT5.

Beginner traders can benefit from the IFC Markets Educational Center. IFC Markets also presents a wealth of market research and trading ideas, with extensive coverage of commodities. Competitive trading costs and promotions are additional reasons to put this broker on a shortlist.

IFC Markets does not offer outright futures contracts but presents traders with continuous commodity and index CFDs identified by the prefix #C-. Traders have a choice of more than three dozen trading instruments, plus the option to create others via the NetTradeX trading platform for extensive trading opportunities.

FXCM

FXCM presents an excellent choice for futures trades who prefer algorithmic trading solutions as it offers traders numerous platforms and competitive trading costs. Besides the market leading MT4, the TradeStation and NinjaTrader platforms are also available. Social traders may connect via ZuluTrade, and its latest addition, Capitalise AI, which allows traders to automate strategies by typing their ideas in an intuitive, code-free environment. FXCM also presents six specialty platforms for algorithmic traders.

The FXCM App Center allows traders to upgrade their trading platform or acquire strategies, custom indicators, and other trading tools. Many are available free of charge, while the more sophisticated ones come at a cost.

Traders also get a commission-free pricing environment with acceptable spreads and high leverage of up to 1:400 for most traders. FXCM’s Active Trader Program rewards high-volume traders.

InvestMarkets

InvestMarkets offers an intuitive web-based trading platform with CFD contracts on commodity and index futures. It is easy to understand, and traders get all the relevant information in a well-presented format. InvestMarkets maintains dozens of trading instruments for traders seeking exposure to futures markets.

The trading platform includes trading services from Trading Central and TipRanks. Traders will receive a wide range of research and education at the former, including trading signals. The latter presents analyst coverage from 15,000+ members, helping retail traders navigate fast-moving markets.

InvestMarkets offers leveraged trading with negative balance protection. Traders who prefer mobile trading will find the user-friendly InvestMarkets mobile app of interest.

What are Futures Contracts and Where Did They Come From? H2

Futures trading traces its origins to farmers planting crops and locking in prices before the harvest. Farmers face many challenges beyond their control, primarily the weather and ecological issues. A futures contract is a legally binding obligation to deliver the product, usually a commodity or financial product, at a future date at the specified price.

Futures contracts allow sellers to achieve price security, hedge against risks, or minimize the impact of unforeseen events. Futures are derivatives, and the best futures trading brokers offer leveraged trading accounts.

Besides hedging against future risks, futures contracts allow traders to speculate on price action. Most international brokers also offer futures CFDs, a derivative of a derivative, and the most efficient tools for traders, as it purely speculates on price action without underlying ownership.

This is how a farmer might trade futures to protect their business:

  • Farmer John has a cattle ranch and primarily produces milk and beef. Among his costs are feeding his livestock, and his milk cows have a diet consisting of grass, hay, and corn. The beef cows additionally consume soybeans for the added protein. Farmer John sources grass and whey but must purchase corn and soybeans from the market. Otherwise, he cannot sell his milk and beef.
  • Prices fluctuate for the items Farmer John must buy and wants to sell. Supply and demand dictate price action, and price volatility is common in agricultural commodities. Cost control ensures that Farmer John can make enough profit to plan for the next season. By using futures contracts, he can accomplish calculable stability in his profit margins. When the prices of corn and soybeans reach a level he accepts, he can purchase enough quantity for the next season.
  • When the price of milk and beef reaches a level Farmer John accepts, he can sell a futures contract to deliver the agreed volume at the contract price on the specified date, without having the finished goods just yet. He knows the quantity and availability of his milk and beef and guarantees his cash flow by selling a futures contract.
  • When costs for the goods Farmer John must purchase are lower, his profit margins will increase. The same applies for the items he sells in the opposite direction, with lower prices decreasing margins. Ideally, Farmer John seeks to buy products low and sell them high, like any investor or trader.

Without futures contracts, farming would be nearly impossible to maintain today. Farmers rely on futures trading to navigate some of the uncertainties they face. Futures trading can also backfire and harm their profitability. Once a futures contract is sold by a farmer, it becomes a legal obligation to deliver. It does not matter what happens to prices. Therefore, buyers of futures contracts also benefit from cost control.

Futures contracts also exist to ensure the stability of the supply chain. Without them, global supply chains could not function efficiently, magnifying inflationary pressures and harming the economy. Imagine if Farmer John would have to buy his goods at a high price and sell them at a low price. He might not have sufficient capital for the next season, taking his supply offline. Other farmers might face similar issues, making products more expensive, which helps Farmer John. The benefit fades if costs rise to the point of demand destruction, resulting in a price crash amid over supply. The former feeds inflation, the latter deflation.

Futures trading originated with farmers but has spread to cover hard commodities, whether mined or extracted, and other financial products. Many traders speculate on index and currency futures but must monitor expiration dates and rollovers. The further the expiry date, the higher the spread on futures contracts, adding to trading costs. CFDs on futures can offer more cost-efficient trading instruments. Most futures brokers have either continuous trading or automatic rollovers to the next contract, adjusting the trading account balance to account for the difference between the expired futures contract and the new one.

Is Futures Trading Right for You?

Futures trading can offer excellent opportunities, but it is not suitable for all traders. As our example illustrated, futures trading spans many sectors and touches industries at the core of the economy and society. Traders cannot focus on just one trading instrument or sector but observe and understand how everything interconnects and reacts.

The most substantial risk in futures trading is the lack of knowledge, as with all other trading instruments. While an abundance of market research is available, either from analysts working at brokers or independent third-party providers, traders must understand the product they trade. Futures trading can be risky if traders rush into it unprepared.

Other risks when trading futures contracts include volatility, the use of leverage, and the potential liability to deliver the goods or accept delivery. It can also entail transportation and storage costs.

Two ways to eliminate the risk of making or accepting the delivery, transportation, and storage costs associated with futures trading:

  • Closing the position before the expiry date
  • Trading CFDs on futures contracts rather than actual futures contracts

Traders should also consider how much it costs to trade futures. High trading costs will erode profitability, and traders must understand the fees involved, especially if they are required to close a position before expiry. Since futures trading relies on leverage, financing costs play a pivotal role in the trading cost assessment.

Traders should consider the following factors to calculate how much it costs to trade futures:

  • Commissions - Commissions apply when opening and closing a position. They can range from less than $1.00 to above $10.00. Many CFD brokers offer commission-free trading, eliminating this cost.
  • Trading Platform/Market Data Fees - The costs depend on the trading needs and can be free of charge, often associated with deposit size and trading volume, or exceed hundreds of dollars. CFD brokers generally provide both free of charge.
  • Swap Rates - Since futures trading relies on leverage, swap rates, or financing costs on leveraged overnight positions, it becomes the most overlook trading cost. The further away the expiry date, the more time a trader enjoys to maintain the position. Swap rates apply daily though and can evaporate profits.
  • Spreads - Day traders and scalpers rely on tight spreads. Tight spreads also indicate deep liquidity provided by the broker. Both are necessary to increase trading profits.
  • Point Value - The point value refers to how much money each point costs. Outright futures trading can rack up profits and losses fast. For example, the smallest futures contract on the S&P 500 Index fluctuates in value by $5 per point. CFD brokers offer smaller contract sizes, making it better for beginner traders and those with smaller portfolios.

Futures Trading and Margin Accounts

Futures contacts are usually sized at relatively large volumes, making margin trading essential. Without using margin accounts, or leverage, retail traders would struggle to afford futures contracts.

Example:

  • Trader Jane wants to buy a futures contract in WTI crude oil. The cost per barrel is $85.60, and the contract size is 1,000 barrels.
  • Without leverage, trader Jane must pay $85,600 to buy this contract (1,000 barrels multiplied by the $85.60 cost per barrel).
  • Trading with one of the best futures trading brokers, trader Jane gets 1:100 leverage, resulting in a cost of $856 or the same contract ($85,600 divided by 100). Some brokers display a margin percentage. In our example, it is 1%. Traders must multiply the margin by the trade value to get the capital requirement.

Tips Getting Started with Futures Trading

The trading platform fulfills a central role and determining which futures trading platform is the best can pose a challenge for any trader.

The best futures trading platform should include:

  • Real-time market data
  • Extensive research and screening tools
  • Customization options via third-party providers
  • Support for algorithmic trading
  • In-depth trading information

The best futures trading brokers will also provide competitive trading costs, high leverage, quality market research, and educational resources for beginner traders. Finding the best futures trading platform is a challenge, but futures trading broker reviews, such as this one, help traders navigate the complex brokerage scene and highlight the best choices for retail traders.

Futures trading - first steps

Beginner traders should initially focus on education and research. They must understand how the futures market functions and the importance of cross-asset and cross-sector correlations. After getting comfortable with a basic level of understanding, trying a demo account then a live account with an affordable deposit should lead to learning by doing.

Trading futures remains reliant on leverage, also known as margin trading. Therefore, trading with a broker offering lower swap rates will increase overall profitability. The order ticket is easy to understand. Traders select the direction and the trading volume of the desired contract.

Bottom Line

Futures are an exciting assets class which can offer excellent opportunities for profit, but neither the risks nor large contract sizes are suitable for all traders. Brokers offering CFDs based on futures contracts can present a more cost-effective and straightforward approach to get exposure to futures prices. Traders can open leveraged and affordable accounts at such brokers without worrying about the delivery, storage, and cost of the underlying goods that they could be exposed to in the legacy futures market.

FAQs

Can I trade futures with $500?

It depends on the minimum deposit of the broker, but it is enough for most brokers offering CFDs based on futures contracts.

How do I choose a futures broker?

Traders can choose a futures broker via extensive research of futures trading broker reviews and their own self-directed research.

What are futures brokers?

Future brokers connect traders to the futures markets, accept deposits, facilitate trading, and process withdrawals. They provide trading platforms and some present market research.

Do futures brokers limit you to trading only one contract?

No, unless you have only deposited sufficient margin to cover one contract.

How do futures brokers make money?

Brokers offering real futures contracts make their money by charging commissions on every trade, while brokers offering CFDs on futures may make their money in the same way but are also likely to profit by taking the other side of their clients’ trades, profiting from net losses.

How much money do you need to trade futures?

One contract of the CAD/USD micro futures contract usually requires a maintenance margin of only $150, but most brokers offering direct trading in futures contracts require higher minimum deposits. To trade futures safely and systematically in the real market, you probably need approximately $7,500 at least.

Huzefa Hamid

I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.