Futures are another lucrative alternative that the financial market offers the world. In this article, we present a list that covers the best futures trading platforms in 2021 and all you need to know about them.
One of the trading opportunities that a broker can offer you is access to futures through their platforms. Futures are contracts where you agree to buy or sell at a certain date and price. These agreements can be signed for several assets like commodities, stocks, forex currency pairs, and indices.
What is a Futures Trading platform?
A Futures Trading Platform is where you can place trades and buy or sell a futures contract. It will be offered by a broker. The platform gives you access to the assets or the financial contracts you want. The platform’s broker should be regulated by financial authorities to ensure that your funds are protected from bankruptcy or fraud.
Not all brokers offer platforms with futures contracts, but those that do understand the importance of their historical background. These contracts evolved from a market strategy implemented by farmers who tried to reduce their risk in the future using speculation.
In this way, before the crops were harvested, the farmer and the buyer knew how much of the product they would be buying, when, and at what price.
3 ways you can benefit from a futures trading platform
Futures trading can bring financial benefits to both parties. We will give three of the many reasons.
- First, it is possible to speculate in such a way that you can buy low and sell high depending on your position. It is only a matter of knowledge and understanding in which direction the market will go in the future.
- Secondly, futures are attractive because of their high leverage. Traders can present themselves to a greater value thus opening the possibility of multiplying their gains.
- Lastly, futures is a very liquid market. This can mean lower spreads and many buying and selling opportunities.
Our picks for the best platforms for futures trading
Below we have added a table with our featured platforms. These are our best futures trading platforms for 2021 because of the strong team behind them that has allowed them to have an excellent historical performance. Great platforms usually have useful features such as alerts, news, technical analysis, and more.
How do futures trading platforms work?
Trading platforms can be used through brokers who will ask you for a fee. You can buy, sell, or hold funds online, and manage your portfolio. This software usually has live quotes, special tools, news or alerts that will keep you updated on the market.
3 Steps to start trading with a futures platform
Open a trading account
Once you have chosen your top futures trading platform, you can open an account on a broker’s website by clicking on the registration button. They will ask you for your basic personal information like number, email, name, and password. A verification code or link will be sent to your email to activate your account.
Choose a futures trading platform
As soon as your account is verified, you can make your initial deposit. Some brokers ask for a minimum first deposit. Remember to look at the payment methods to see which one suits you best. Usually, it can be epayments, bank wire transfers, credit cards, or debit cards.
Place your trade
Once your account is credited, it’s time to use the available balance to find your futures contract. You must place a trade with your broker and specify certain details like the contract size, expiration date, scrip, currency, unit of measurement, and so on.
What are the advantages of using a platform for future trading
Below we have specified some of the advantages of using a platform for futures trading.
- Investors can speculate on the price movements of the underlying asset on the futures contract.
- Leverage allows you not to pay directly.
- Futures can be used to reduce the risk of a price drop in the future.
- Possibility to multiply your gains.
- Futures is a liquid market with many opportunities.
- The contracts boost the productiveness of the underlying asset.
- It is easy to understand the price and date of a futures contract.
What are the disadvantages of using a platform for futures trading
- Using margin or leverage can cause big losses.
- Speculation may be risky.
- It is possible to lose your initial margin if the price goes the wrong way.
- You can miss good market opportunities if the price acts differently as you speculated.
Expert tip on selecting futures trading platform
Futures are usually traded on an exchange where both sides agree to a financial term that will be legally arranged using the contract. This commitment must be done using a platform provided by a broker. To be able to select your futures trading platform, it is better to understand how the market works. Also, it is important to have sufficient funds because speculation can go the wrong way, and futures contracts use leverage. Taking the previous factors into consideration, it is important to have a great base knowledge of the underlying asset, its historical performance, and how it might react in the future. It is also a good idea to trade without letting your emotions overpower you. Being calm is part of making smart decisions.
How to choose the best platform for futures trading?
Once you are sure that future contracts are your doorway to the financial market, then the next step is to choose the best futures trading platform. Below we have elaborated some of the most essential points you should consider before opening an account.
Is the broker regulated?
A regulated broker is the one that is supervised by a financial authority to ensure that your funds are safe from bankruptcy, fraud, and money laundering. This also means that your platform is legit and secure.
What fees and charges apply?
The fees and charges will depend on the broker. It is important to look at these to know when you will have to pay them and how. See if the broker has commissions, what their spreads are, check their deposit or withdrawal methods, and more.
What payment methods are accepted?
This will depend on the broker, but they are usually credit cards, debit cards, bank wire transfers, and e payments such as Skrill and Neteller. Some brokers allow specific national payment methods depending on the country you are in.
What are the available assets to trade?
Brokers can offer many assets such as bonds, futures, commodities, stocks, forex, ETFs, indices, and more. However, futures contracts have the following underlying assets: stocks, commodities, forex currency pairs, interest rates, and bonds.
Is there a demo account?
A demo account is always a good idea for both experienced and beginner traders. It will allow you to practice with online money while using real-time quotes. It is important to look at the demo account details such as when it will be deactivated or if you can open it whenever you like.
What is the account minimum?
This will depend on the broker, the platform, and the account type. Even if there is one account, a minimum could still be required. The minimum amount for different account types will vary since they are created to fit different needs.
What educational resources are available?
Educational resources are key if you want to resolve a doubt or learn something new. See if your broker offers webinars or video lessons. They could have downloadable ebooks, a financial glossary, or a FAQ section.
Is there help and support available?
If you have an emergency or a question, you might need customer support. After understanding your needs, see if there are live chat, phone numbers, a physical office, or emails available.
Is there a mobile platform or app?
For clients who like to trade on the go, it is important to check if the broker has trading apps for Android or iOS. Some of these can also be downloaded on your desktop or simply used in your browser. It will depend on your preference and the platform’s intuitiveness.
Frequently Asked Questions
If a futures trading platform will have fees depends solely on the broker. If it has low fees, it is a good idea to look at the commissions. This is how you can find the broker that has the lowest costs.
It will depend on your needs and goals but look for the one that has a good educational section since knowledge is important when speculating.
It could be technical analysis, which will help you gain insight into the market. It includes charts, indicators, or oscillators.
Opening a trading account will not take long. However, some brokers like to take up to one business day to verify your information.
A futures trading broker makes money off fees and commissions. Each broker will offer different tariffs.