Best Futures For Day Trading

futures markets

You go by selling your futures contract when you believe the price is about to go down soon. Orders in these strategies can be placed quickly, making the experienced investors get their money fast. Lastly,commissions in the trade are lesswhencompared to otherforms of investment.

active and experienced

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  • When new traders start to learn more and gain some experience, it is easy to make mistakes that can cause problems and cost too much money.
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  • Only risk capital should be used for trading and only those with sufficient risk capital should consider trading.

What happens if you were right about predicting that price increase? You’ll earn profits by selling those contracts when they are worth more money later. However, if the price falls instead of rising, you will suffer a financial loss.

Before placing your 1st futures trade, you need to open an account with a registered futures broker who will maintain your account and guarantee trades. In the futures business, brokerage firms are known as either an introductory broker or a futures commission merchant . You’ll want to see whether your current broker provides this service. When you’re getting started, choose products that are highly liquid. Trade in active markets where there’s sufficient volume for you to enter or exit your orders without greatly affecting price.

High Liquidity For Low Slippage

It means that when you sell your futures contracts, you are pushing the price down. The result is that you will sell some or all of your contracts at a lower price. Slippage refer to the difference between your desired price and the lower price you sold at. Blain Reinkensmeyer has 20 years of trading experience with over 2,500 trades placed during that time. He heads research for all U.S.-based brokerages on and is respected by executives as the leading expert covering the online broker industry. Blain’s insights have been featured in the New York Times, Wall Street Journal, Forbes, and the Chicago Tribune, among other media outlets.

Interactive charges the lowest commission on futures trades — $0.85 — compared to other brokers. The brokerage also boasts the lowest margin rates of 1.91% to 1.41%. Trading futures on TD Ameritrade gives you access to over 70 futures products available 24 hours a day, 6 days a week. The brokerage requires a $1,500 account minimum and charges a $2.25 fee per contract plus specific exchange and regulatory fees.

futures options

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When does the futures market open on Sunday?

This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. For instance, suppose you expected gold prices to decline, but the cocoa market to rally. If one of those expectations proved wrong, while the other was right, you could offset a loss with a gain. DTTW™ is proud to be the lead sponsor of TraderTV.LIVE™, the fastest-growing day trading channel on YouTube.


The lower the margins, the less trading capital you need to keep in your trading account. In our ranking, we used the simpler method of calculating the average bar range. We calculated the average hourly range of the 10 futures contracts and multiplied them by their point value. This formula gives us the dollar value of the average hourly range. Remember, each futures contract has different margin requirements.

The measure of the amount of movement is known as volatility. Elsewhere, I explained why day traders should trade futures. Traders who bought the idea are wondering which market offers the best futures for day trading. We’ve called Charles Schwab the best all-around stock broker we know of as well as one of the best stock brokers for beginners as it checks most of the boxes today’s investors want. It also has a vast branch network and excellent customer service.

How can I trade futures?

Beginners exploring trading during their learning phase can start with the mini-series contracts. The per-contract cost depends on which instrument you trade. Interactive Brokers charges as little as $0.08 per Small Exchange futures contract.

This will help ensure you can exit a position as easily as you entered. Futures trading could be a profit center for investors and speculators, as well as a good way to hedge your portfolio or reduce risks. Similar to any speculative market, it isn’t right for everyone, particularly the risk adverse. But if you’re seeking a fast-moving investment opportunity, futures trading may be a good deal. Steven Hatzakis is the Global Director of Research for

Previously, he was a contributing editor at BetterInvesting Magazine and a contributor to The Penny Hoarder and other media outlets. The underlying 5,000 bushels multiplied by the price per bushel ($7.73) equals $38,650 for the total trade value. 5% of the trade value or $1,932 is the margin requirement needed to open this position. A sell-to-close order allows you to exit your existing long position. The best online brokers 2023 review, our 13th annual, took three months to complete and produced over 40,000 words of research.

The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. Matt is a Certified Financial Planner® and investment advisor based in Columbia, South Carolina. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.

But this provides a good estimate for comparison of volatility between futures contracts. Futures provide a fast and cost-effective way to access financial and commodity markets around the clock. Once you’re ready to start trading futures, begin with simulated trading to become familiar with market terminology, price quotations and the general behavior of a specific market.

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When you’re ready, you can open a real account and fund it with real dollars. Crude oil provides decent volume, but it also requires the most margin and is the most volatile. If you held one contract during an average day, your profit/loss could swing $3,200 (3.2 points x $1000/point).

To make your commitment more firm, consider trading with stop-loss orders. The idea is to decide on a bailout point first, and then set a stop at that price. One of the best approaches to this is to use pending orders.