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Best Future Brokers Of USA In 2025

Best Future Brokers Of USA In 2025
Written by author Arjun Remesh | Reviewed by author Shivam Gaba | Updated on 9 January 2025

You can review the top 10 reliable and regulated futures brokers in the United States of America in this article. We tested their real money accounts and also compared their main criteria.

Since there are multiple options available, choosing the best futures broker among them can be extremely difficult.  When you are searching for a futures broker, it is recommended that you do in-depth research, make detailed comparisons and verify the safety of the brokers in order to avoid scam brokers and poor-quality platforms.

In order to simplify the process of selecting a futures broker, we have made a list of the top brokers and what type of trading they specialize in. This is followed by feature comparisons, reviews and frequently asked questions. So be patient and enjoy the journey.

Best future brokers in USA 

RankBrokerScoreBest For
1Tradestation4.8Best futures broker overall. Great for mobile trading. Very good research tools.
2Interactive Brokers4.7Best choice of different futures contracts. Very low trading fees. Great research tools.
3tastytrade4.6Best for beginners. Great research tools. Very good educational materials.
4Optimus Futures4.6Best for active trading. Fast account opening. Very good customer service.
5AMP Futures4.6Best choice of different trading platforms. Very good for algorithmic trading. Very good for education.
6Webull4.5Best for mobile trading. Very good trading platform. Fast account opening
7Charles Schwab4.4Best research tools. Great customer support. Very good option for active trading.
8NinjaTrader4.3Best educational materials. Great for algorithmic trading. Great research tools.
9moomoo4.2Best trading conditions. Great educational materials. Fast account opening.
10E*Trade3.9Best web based trading platform. Very good educational materials. Good research tools.

Safety and regulations in the United States  

In order to safeguard the interests of traders and maintain market stability, US regulators impose strict requirements for futures trading. It is monitored by regulatory bodies. Let us learn about them in details now.

  • Securities and Exchange Commission (SEC): Although Securities and Exchange Commission (SEC) does not monitor futures brokers directly, it ensures transparency and helps in preventing fraud in financial markets. This indirectly boosts confidence in futures trading.
  • National Futures Association (NFA): The National Futures Association (NFA) can be described as a self-regulatory organization authorized by Commodity Futures Trading Commission (CFTC) for monitoring futures as well as forex brokers.Membership is compulsory for brokers, thus providing an additional layer of accountability. The adherence of the broker can be verified through the public database of NFA. 
  • Commodity Futures Trading Commission (CFTC):  As a primary regulator for futures and option markets, CFTC ensures transparency, financial integrity and protection against market volatility. Futures brokers must adhere to the CFTC standards in order to operate transparently and securely.
  • Securities Investor Protection Corporation (SIPC): The SIPC safeguards up to $500,000 in the accounts of clients (this includes $250,000 for cash) when a brokerage fails. Although it does not cover future contracts, it safeguards other assets held with multi-asset brokers. 
  • Financial Industry Regulatory Authority (FINRA): FINRA observes brokers-dealers and securities firms and complements the CFTC and NFA by ensuring financial as well as ethical practices for the firms. 

Futures Trading Regulation 

For doing futures trading in the USA, it is important that brokers comply with the strict CFTC rules such as, margin requirements, transparent reporting and separation of client funds. These protective measures help in ensuring safety for the futures traders. Brokers also educate traders about the risks involved in the futures market, especially the possibility of incurring significant losses due to leverage.  

Tier 1 International regulators

While searching for international brokers for futures trading, tier 1 regulators like Australia’s Securities and Investments (ASIC) and Financial Conduct Authority (FCA) of the United Kingdom or UK will determine the international standards for market integrity and investor protection.

However, you should make sure that your chosen broker adheres with CFTC and NFA regulations for legally operating in the USA. This dual adherence ensures compliance to both domestic and international standards, thus providing enhanced security for traders.

Safety and regulation comparison for top brokers

Here are some significant areas which help in determining the reliability of a broker, along with their top-tier regulators, investor protection methods and whether they have any history of scandals or not. The whole information has been simplified for you in the table provided below:

BrokerTradestationInteractive BrokerstastytradeOptimus FuturesAMP FuturesWebullCharles SchwabNinjaTradermoomooE*Trade
Top -tier RegulatorsSEC and FINRA (USA)FCA (UK), ASIC (Australia), SEC (USA)SEC and FINRA (USA), ASIC (Australia)CFTC, NFA (USA)CFTC, NFA (USA)SEC and FINRA (USA)SEC and FINRA (USA)CFTC, NFA (USA)SEC and FINRA (USA), CIRO (Canada), ASIC (Australia), FSA (Japan)SEC and FINRA (USA)
Trusted BrokerYesYesYesYesYesYesYesYesYesYes
Year of Foundation1982197720172004200920161971200320181982
Investor Protection$500k (cash up to $250k)$500k (cash up to $250k)$500k (cash up to $250k)NoNo$500k (cash up to $250k) to US, 500 000 HKD to Hong Kong$500k (cash up to $250k)No$500k (cash up to $250k), 1M CAD to Canadian clients, 10M JPY to Japanese clients$500k (cash up to $250k)
Involved in ScandalIn 2022 paid a fine for failing to register its Crypto lending productClean track record: no major regulatory incidents or finesClean track record: no major regulatory incidents or finesClean track record: no major regulatory incidents or finesClean track record: no major regulatory incidents or finesIn 2023 paid $3 Million for Options Customer Approval ViolationsIn 2022 agreed to pay $187 million to settle an SEC investigation into the firm’s robo-advisor, Schwab Intelligent Portfolios.Clean track record: no major regulatory incidents or finesClean track record: no major regulatory incidents or finesIn 2014 paid $900,000 for Supervisory Violations Related to Best Execution and Protection of Customer Order Information

Comparison of fees 

A comparison has been made between the fees of selected platforms in the table provided below. If you are an interactive broker, you can get the most inexpensive US micro e-mini stock index futures fees per contract along with Webull.

BrokerTradestationInteractive BrokerstastytradeOptimus FuturesAMP FuturesWebullCharles SchwabNinjaTradermoomooE*Trade
US micro e-mini stock index futures$0.50 per contract$0.25 per contract$0.85 per contract$0.25 per contract$0.49 per contract$0.25 per contract$2.25 per contract$0.35 per contract – Free plan; $0.25 per contract – Monthly plan; $0.09 per contract – Lifetime plan$0.50 per contract$1.50 per contract
US stock index futures$1.50 per contract$0.85 per contract$1.25 per contract$0.75 per contract$1.03 per contract$1.25 per contract$2.25 per contract$1.29 per contract – Free plan; $0.99 per contract – Monthly plan; $0.59 per contract – Lifetime plan$0.50 per contract$1.50 per contract
UK stock index futures£1.70 per contract$0.75 per contract£1.16 per contract$1.29 per contract – Free plan; $0.99 per contract – Monthly plan; $0.59 per contract – Lifetime plan
German e-mini stock index futures€0.80 per contract€1.11 per contract$1.29 per contract – Free plan; $0.99 per contract – Monthly plan; $0.59 per contract – Lifetime plan

Comparison of non-trading fees

Non-trading fees like account, deposit and withdrawal fees have been compared in the table below. Tradestation has $0 deposit and withdrawal fees whereas Interactive Brokers lack activity fees 

BrokerTradestationInteractive BrokerstastytradeOptimus FuturesAMP FuturesWebullCharles SchwabNinjaTradermoomooE*Trade
Account fee$0$0$0$0$0$0$0$0 – Free plan or $99/mo Monthly plan or $1499 once Lifetime plan$0$0
Deposit fee$0$0$0$0$0$0$0$0$0$0
Withdrawal fee$0$0$0$20$30$0$0$0$0$0
Inactivity fee$10 per month for accounts below $5000 or for less than 10 transactions in 3mo$0$0$0$0$0$0$25 per month if no trades$0$0

Comparison between deposit, credit card and account opening

In the table provided below, a comparison has been made deposit, credit or debit card availability and account opening speed of the chosen platforms. Tradestation has no requirement of minimum deposit and tastytrade has a swift account opening speed at 1 day.

BrokerTradestationInteractive BrokerstastytradeOptimus FuturesAMP FuturesWebullCharles SchwabNinjaTradermoomooE*Trade
Minimum deposit$0$0$0$500$100$0$0$400$0$0
Time to open account1-2 days1-3 days1 day1 day1-3 days1 day1 day4-5 days1-3 days7 days
Credit/Debit cardNoNoNoNoNoNoNoNoNoNo

Comparison between mobile, desktop and web trading platforms

Mobile, desktop, and web trading platforms have been compared in the table below. It can be concluded that Tradestation possesses the best overall mobile app whereas  Webull possesses the best trading platform. 

BrokerTradestationInteractive BrokerstastytradeOptimus FuturesAMP FuturesWebullCharles SchwabNinjaTradermoomooE*Trade
Trading platform score4.94.94.14.84.95.05.04.84.54.4
TradingviewYesYesNoYesYesYesYesYesYesNo
Algorithmic tradingYesYesYesYesYesYesYesYesYesYes
Demo accountYesYesYesYesYesYesYesYesYesYes
Mobile app score5.04.94.64.24.45.04.74.24.94.5

Comparison between product selection, markets and financial assets  

All the available financial products have been compared and the results have been provided in the table below. From the results, it can be concluded that Interactive Brokers had the main choice when it came to the futures market at 32. 

BrokerTradestationInteractive BrokerstastytradeOptimus FuturesAMP FuturesWebullCharles SchwabNinjaTradermoomooE*Trade
Futures (markets)11328141058753

Comparison between user base of top futures broker in USA

The number of clients per broker has been compared in the table below. It can be concluded from the results that Charles Schwab had the highest user base. 

BrokerTradestationInteractive BrokerstastytradeOptimus FuturesAMP FuturesWebullCharles SchwabNinjaTradermoomooE*Trade
Number of clients220k2.6M105kN/AN/A20M35.6M1M23.2M5.2M

Review of top future brokers in USA

Interactive brokers 

BrokerInteractive Brokers
Minimum deposit$0
Deposit/Withdrawal methodsBank transfer
Trading platform score4.9
Futures (markets)32
US micro e-mini stock index futures fee$0.25 per contract
Withdrawal fee$0
Inactivity fee$0
US stock index futures$0.85 per contract

Interactive brokers provide access to diverse range of global future markets including commodities, indices and currencies. It provides advanced trading tools like Trader Workstation (TWS) for detailed analysis and strategy execution. It charges low commissions with classified pricing for regular traders. It is monitored by regulatory bodies like NFA and CFTC for safe and secure trading. 

Pros

  1. It has a strong regulatory oversight which ensures safe and secure trading
  2. It has an extensive collection of global future contracts
  3. It has a highly specialized platform ideal for experienced traders

Cons

  1. It lacks social and copy trading features
  2. It provides limited customer support during weekends 

Optimus Futures

BrokerOptimus Futures
Minimum deposit$500
Deposit/Withdrawal methodsBank transfer
Trading platform score4.8
Futures (markets)14
US micro e-mini stock index futures fee$0.25 per contract
Withdrawal fee$20
Inactivity fee$0
US stock index futures$0.75 per contract

It provides access to a diverse range of futures contracts, such as indices, commodities and currencies. It is regulated by regulatory bodies like NFA and CFTC for secure and cooperative trading.  It offers numerous platform options, such as CGQ, Sierra Chart and Meta Trader 5.  It provides direct market access (DMA) for quick execution and transparency.

Pros 

  1. It provides numerous platform options for different trading styles
  2. It has a robust regulatory oversight which ensures safe and secure trading
  3. It charges transparent pricing with competitive commissions
  4. It provides personalized customer support according to the requirements of individual traders.

Cons

  1. It offers limited educational resources for newcomers
  2. Platform fees may apply for some third party platforms
  3. It lacks social and copy trading features

Tradestation

BrokerTradestation
Minimum deposit$0
Deposit/Withdrawal methodsBank transfer
Trading platform score4.9
Futures (markets)11
US micro e-mini stock index futures fee$0.50 per contract
Withdrawal fee$0
Inactivity fee$10 per month for accounts below $5000 or for less than 10 transactions in 3mo
US stock index futures$1.50 per contract

It is an advanced trading platform equipped with tools like EasyLanguage and RadarScreen for custom strategies. It provides access to diverse range of future contracts, such as indices, forex and commodities.  It offers a high performance mobile app with real time futures market data. 

Pros

  1. It offers advanced tools and specialized platforms for strategy development
  2. It offers various types of futures contracts across multiple asset classes
  3. It offers comprehensive educational materials and resources

Cons

  1. Platform complexity can be overwhelming for newcomers
  2. It does not have social or copy trading features for future traders 

tastytrade

Brokertastytrade
Minimum deposit$0
Deposit/Withdrawal methodsBank transfer
Trading platform score4.1
Futures (markets)8
US micro e-mini stock index futures fee$0.85 per contract
Withdrawal fee$0
Inactivity fee$0
US stock index futures$1.25 per contract

It provides access to various kinds of future contracts, including micro and mini contracts. It is a user-friendly platform which has been designed for active as well as options-focused traders. It charges low commissions with transparent pricing. There are no hidden fees. It offers proper educational resources, such as in-platform tutorials and videos.

Pros

  1. It offers strong educational content for helping traders to develop their skills
  2. It is an intuitive platform which is appropriate for both newcomers and active traders
  3. It offers quick and reliable order execution

Cons

  1. It offers limited advanced tools for professional futures traders compared to platforms like TWS 
  2. It does not provide access to global futures market outside USA 

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Ninja Trader

BrokerNinjaTrader
Minimum deposit$400
Deposit/Withdrawal methodsBank transfer
Trading platform score4.8
Futures (markets)7
US micro e-mini stock index futures fee$0.35 per contract – Free plan; $0.25 per contract – Monthly plan; $0.09 per contract – Lifetime plan
Withdrawal fee$0
Inactivity fee$25 per month if no trades
US stock index futures$1.29 per contract – Free plan; $0.99 per contract – Monthly plan; $0.59 per contract – Lifetime plan

It provides access to advanced trading platforms equipped with specialized charts and automated trading tools. It provides direct market access (DMA) for quick execution and low latency. It is monitored by various regulatory bodies like NFA and CFTC.

Pros

  1. It is a robust platform with modern tools for experienced traders
  2. It charges low commissions and offers flexible pricing structures
  3. It provides wide range of future products across asset classes

Cons

  1. It lacks integrated social or copy trading features
  2. It may charge additional fees for platform upgrades and data feeds 

AMP futures

BrokerAMP Futures
Minimum deposit$100
Deposit/Withdrawal methodsBank transfer
Trading platform score4.9
Futures (markets)10
US micro e-mini stock index futures fee$0.49 per contract
Withdrawal fee$30
Inactivity fee$0
US stock index futures$1.03 per contract

AMP futures provides access to different kinds of future contracts, including micro and mini contracts. It offers multiple platform options such as Meta Trader 5, Sierra chart and CGQ. It provides direct market access (DMA) for swift and reliable execution.  It is monitored by NFA and CFTC, thus ensuring secure trading.

Pros

  1. Extensive range of futures contracts across asset classes
  2. It charges extremely low commissions and margin rates
  3. Robust regulatory oversight ensures safe trading

Cons

  1. Advanced platforms can be challenging for beginners
  2. It offers fewer educational resources to newcomers compared to its rivals

moomoo

Brokermoomoo
Minimum deposit$0
Deposit/Withdrawal methodsBank transfer
Trading platform score4.5
Futures (markets)5
US micro e-mini stock index futures fee$0.50 per contract
Withdrawal fee$0
Inactivity fee$0
US stock index futures$0.50 per contract

It offers commission free trading with costs built into competitive spreads. It is a user-friendly platform with advanced tools for charting and technical analysis. It is monitored by regulatory bodies like SIPC and FINRA for secure trading. It provides real time market data with customizable price alerts.

Pros

  1. It offers commission fee trading which helps in minimizing costs for future traders
  2. It provides integrated tools for technical analysis and real time alerts
  3. It has a robust regulatory oversight for ensuring secure transactions

Cons

  1. It does not provide support for third party platforms like NinjaTrader or MetaTrader
  2. It offers limited selection of futures contracts compared to specialized brokers
  3. It does not have social or copy trading features.

Webull

BrokerWebull
Minimum deposit$0
Deposit/Withdrawal methodsBank transfer
Trading platform score5.0
Futures (markets)5
US micro e-mini stock index futures fee$0.25 per contract
Withdrawal fee$0
Inactivity fee$0
US stock index futures$1.25 per contract

It is a user-friendly platform which has been designed for both desktop and mobile users. It is regulated by SEC and FINRA, thus ensuring safe trading. It provides real time market data and specialized charting tools. 

Pros

  1. It is a simple platform, ideal for newcomers
  2. It provides access to mobile apps which offers flawless trading on the go
  3. It offers robust regulatory oversight which ensures trading security
  4. Commission free trading reduces costs for future traders

Cons

  1. It does not provide social or copy trading features for future traders
  2. It does not provide proper support to third party platforms like MetaTrader 
  3. It provides limited selection of futures contracts compared to others

Charles Schwab

BrokerCharles Schwab
Minimum deposit$0
Deposit/Withdrawal methodsBank transfer
Trading platform score5.0
Futures (markets)8
US micro e-mini stock index futures fee$2.25 per contract
Withdrawal fee$0
Inactivity fee$0
US stock index futures$2.25 per contract

It provides access to wide range of futures contracts, such as commodities, indices and currencies. It is regulated by bodies like SEC, NFA and CFTC for secure trading. It conducts comprehensive research and provides educational resources for future traders. 

Pros

  1. It offers diverse range of futures products across multiple asset classes
  2. It provides access to intuitive platforms with advanced tools for experienced traders
  3. It has a transparent fee structure with competitive commissions
  4. It offers excellent educational materials for traders of all levels 

Cons

  1. This platform can be complicated for beginners
  2. Limited focus on futures compared to stocks and other asset classes
  3. It does not provide any social or copy trading features

E*Trade

BrokerE*Trade
Minimum deposit$0
Deposit/Withdrawal methodsBank transfer
Trading platform score4.4
Futures (markets)3
US micro e-mini stock index futures fee$1.50 per contract
Withdrawal fee$0
Inactivity fee$0
US stock index futures$1.50 per contract

It provides access to advanced trading platforms like Power E*TRADE with specialized tools. It offers transparent pricing with competitive commission rates for futures trading. It is monitored by regulatory bodies like NFA and CFTC for secure trading. 

Pros

  1. It has intuitive platforms with advanced tools for analysis and execution
  2. It provides comprehensive educational materials for traders of all levels 
  3. It offers reliable customer service with extended availability

Cons

  1. It offers limited features for automated and algorithmic trading
  2. It does not provide social or copy trading features
  3. Commission rates may be higher compared to some specialized brokers

How will you find the best futures brokers in the United States?

Choosing the right stock broker is crucial for both beginners and experienced traders.  You can easily find the right stock broker by considering these factors:

Safety (Regulation): The first and most important factor which you should consider while choosing a broker in the United States is safety. It is recommended that you give priority to those brokers monitored by the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and Financial Industry Regulatory Authority (FINRA).

Fees: Another important factor is fees. It plays an important role in determining the cost-effectiveness of a broker. It will be better if you choose brokers with low or no commissions, competitive spreads and transparent pricing structures. If you are interested in global markets, then platforms with minimal currency conversion fees will be ideal for you.

Mobile apps/trading platforms: You should be careful when choosing a trading platform because its quality can either make or break your trading experience. It is recommended that you choose those platforms which have intuitive interfaces, real-time data as well as tools like price alerts, advanced charting and educational resources. 

How can you invest in futures from the United States? 

If you want to invest in futures from the United States, then you can do the following: 

Select a broker: First, select a broker regulated either by CFTC or by NFA. This ensures adherence to the US laws and provides access to approved futures exchanges like the Intercontinental exchange (ICE) and Chicago Mercantile Exchange (CME). You can search for brokers who offer low margin requirements, robust market data tools and user-friendly platforms.

Open a futures trading account: Futures account usually have stricter requirement compared to standard brokerage accounts. In order to open an account, you may require the following documents:

Valid ID: You will require a valid ID proof like passport or driver’s license 

Social Security Number (SSN) : Social Security Number is very important 

Net worth and trading experience disclosures: It is required when brokers are examining your ability to handle leveraged instruments like truth. 

Proof of residence: You will have to submit documents which can act as your proof of residence, such as bank statement or utility bill. 

Fund your account: You can deposit funds in your accounts by using various approved methods, such as wire transfers and ACH transfers. You should be careful about the minimum deposit requirements of the brokers as they are generally higher for future accounts because of the leveraged nature of the market.

Start trading in futures:  You should use the trading platform of the broker for exploring different kinds of future contracts. You should give importance to some important features, such as, advanced charting tools, real-time market data, order types, such as stop-loss and limit orders for risk management 

Manage risks: Futures trading involves leverage, magnifying both potential gains and losses. You can use tools like, Position sizing, Stop-loss orders and diversification.  Position sizing  will help in avoiding overexposure. Stop-loss orders will help in minimizing downside risks and diversification across asset classes will minimize instability. 

Taxation for futures trading in USA

As a US trader, it is essential for you to understand the tax implications of futures trading in USA so that you can optimize their earnings and ensure adherence to IRS regulations. Here is a simple explanation about specific to futures trading:

Section 1256 contracts: Futures contracts in the USA are classified as Section 1256 contracts. This offers unique tax advantages:

  • 60/40 taxation rule: Profits from futures are taxed as 60% long-term capital gains and 40% short-term capital gains irrespective of the time for which the position is being held
  • Lower effective tax rate: This rule usually results in a lower effective tax rate compared to standard short-term trading.

Loss carrybacks: Losses incurred from futures trading can be carried back for up to 3 years. This provides the traders with an opportunity to offset past gains and potentially reclaim taxes already paid.

Mark-to-market taxation: As a futures trader, you should use mark-to-market method, where all open futures positions are considered closed at fair market value at year end. Profits and losses are reported after they were realized. This simplifies tax reporting to a certain extent but it requires payment on unrealized gains. 

Currency conversion: For futures contracts settled in foreign currencies, gains or losses must be reported in USD. Currency fluctuations may have an  impact on taxable amounts.

Professional tax advice: Since futures taxation is a complicated process, it will be better if you consult with a tax advisor who specializes in futures trading as it can help in ensuring adherence and optimizing tax strategies.

What types of trading are legal in USA? 

USA offers a diverse range of legal trading opportunities across financial markets, with futures trading being one of the most regulated as well as accessible forms. Some of the important types of trading have been discussed below with focus on futures: 

Stock trading: You can buy and sell shares of companies on US exchanges like NASDAQ and NYSE. The whole process is monitored by SEC and FINRA. 

Futures trading:  You can legally trade futures contracts on regulated exchanges like NYMEX, CBOT and CME. It is highly regulated by the CFTC. You can engage in futures for commodities, currencies, financial indexes and many others. Futures trading are required to maintain transparency standards to protect investors.

Commodity trading: Trading physical commodities through futures contracts is allowed on exchanges like the CBOT and NYMEX. It specializes in markets like agriculture, energy and metals.

Derivatives trading: Options on futures and standalone options contracts are also legal and monitored by regulatory bodies like SEC and CFTC. 

Forex trading: U.S. residents can trade currency futures on regulated exchanges or engage in retail forex trading through brokers regulated by the CFTC and NFA.

Cryptocurrency futures: Futures contracts on cryptocurrencies, such as Bitcoin futures, are available on regulated exchanges like the CME. This provides a legal and secure way to trade digital assets.

Although these types of trading are legal, some activities like online gambling and sports betting are considered illegal in many states of USA. You should always ensure that your chosen broker or platform is registered with and monitored by US regulatory bodies like SEC, CFTC or FINRA for trading in a legal and secure manner.

Conclusion 

After examining and comparing the top futures brokers available to US traders across numerous categories, it can be concluded that TradeStation is the best futures broker for US clients in 2025. This is mainly because it has advanced trading platforms, competitive pricing tailored for active traders and access to diverse range of US and global futures market. It is regulated by top US authorities, thus ensuring a secure and transparent trading experience.  

RankBrokerScoreBest For
1Tradestation4.8Best futures broker overall. Great for mobile trading. Very good research tools.
2Interactive Brokers4.7Best choice of different futures contracts. Very low trading fees. Great research tolls.
3tastytrade4.6Best for beginners. Great research tools. Very good educational materials.
4Optimus Futures4.6Best for active trading. Fast account opening. Very good customer service.
5AMP Futures4.6Best choice of different trading platforms. Very good for algorithmic trading. Very good for education.
6Webull4.5Best for mobile trading. Very good trading platform. Fast account opening
7Charles Schwab4.4Best research tools. Great customer support. Very good option for active trading.
8NinjaTrader4.3Best educational materials. Great for algorithmic trading. Great research tools.
9moomoo4.2Best trading conditions. Great educational materials. Fast account opening.
10E*Trade3.9Best web based trading platform. Very good educational materials. Good research tools.

FAQ

Online Broker – what is the role?

A financial broker is best defined as a financial service provider. This provider allows the buying and selling of financial instruments that include ETF’s,, bonds, future contracts stocks and mutual funds through an app or a platform.

With the help of the brokers, U.S Clients get access to main financial markets that include regulated futures exchanges.  People often face difficulty in understanding or choosing the best Broker. It needs to be remembered here that the best broker is one which offers low fees, offers great customer support and is user-friendly. 

Define Futures – How it works?

These are financial contracts by which the buyer is obliged to purchase or the seller is obliged to sell. However, this buy or sell happens on a future date that is decided in advanced.

These are generally used for trading assets that includes commodities like agricultural products or financial instruments in the form of stock market indexes.

Check the Main Features of Futures Contract:

Leverage: In this the traders can control a big position with little capital which is known as margin. This helps in increasing gain but is also risky at the same time.

Standardization: These contracts are usually standardized. This means that their terms are generally predefined. These terms include quality, quantity and settlement dates.

Uses: There are two main uses 1) Hedging and 2) Speculation. Through hedging investors and businesses can protect the price fluctuations. Through selling, traders can sell or buy futures to make profit. This happens due to the change in the price of assets. 

Tips to Choose a Broker?

If you are into futures trading for the first time and things are a bit overwhelming, then these tips might help you.

Check their Regulation: Check that the broker is registered with CFTC. The broker should also be a member of National Futures Association so that compliance is maintained.

Check the Fees: You have to make sure that the broker you choose is offering competitive rates of commission. You need to check if the broker is providing transparent pricing and the margin requirements. You need to keep away from brokers that charge excess fees, especially for withdrawals and accounts maintenance.

Futures-specific tools: The broker you choose should offer some advanced tools. These include technical indicators, real time price tracking and margin calculators.

Platform capabilities: How is the trading platform? You have to be sure that the platform is easy to use and updated offering ease of trading and understanding.

Educational resources: It is always recommended to select brokers that offer educational material. These can be in the form of demo accounts or tutorials which will help traders to make correct decisions.

Is Futures Trading Safe with USA Brokers?

Yes, but you have to look for brokers regulated by the CFTC and NFA.

This will ensure that the brokers are adhering to strict standards. It will also ensure that they are able to maintain financial integrity and investor protection is ensured. If you choose the right and regulated broker, it is completely safe.

Tell me about the fees involved?

Here are some fees which traders might have to pay.

  • Margin interest: Those who trade on a margin might have to pay these fees.
  • Anything related to commission: Brokers can charge per-contract commissions. However, you should be able to find brokers with lower rates like $0.25-$1.50 per contract.
  • Exchange fees: This is the money that has to be paid specific to the market you’re trading on, such as the CME or NYMEX.
  • Platform fees: This can be in the form of subscription fees for advanced futures trading platforms or market data.
  • Inactivity fees: There are many brokers who charge traders for inactive accounts. Keep an eye on this kind of fees.

Documents Required – What are the essential ones?

You will need the following

  • Social Security Number (SSN) or ITIN
  • Valid ID (This can be a passport.
  • Proof of residence – This can be in the form of lease agreement or utility bill.
  • Net worth and trading experience disclosures: You might be asked about some additional financial information.

US Clients trading international futures – is that possible?

There are U.S. brokers that offer easy access international futures markets. These include exchanges like Euronext or Tokyo Commodity Exchange (TOCOM) through a CFTC-regulated broker. Thus, it is important to ensure that the broker you choose offers this facility.

Futures Trading and Risk Managing Strategies

Risk management strategies are a must and can never be ignored. Let’s check some of them.

  • Set stop-loss orders: Traders can set an exit price for the futures contracts.
  • Position sizing: If this is done then only a portion of your account balance in a single position will be traded which will avoid losses.
  • Different Trading Options: Trade across different asset classes. This will help in reducing risks.
  • Keep a track of margin requirements: This will help to avoid margin calls during volatile markets.
  • Need to stay updated: The broker’s real time market data can be used and research tools to stay updated on price trends and market events.

How is SIPC related to futures trading?

The SIPC (Securities Investor Protection Corporation) offers protection to U.S trader by providing insurance to their brokerage accounts up to $500,000. This include $250,000 for cash in case the broker becomes insolvent.

It needs to be noted here that SIPC does not cover future contracts. It offers protection for as well as securities held in the brokerage account. 

Brokerage Account – Will I also need one?

Yes, because it is necessary for accessing regulated U.S. futures exchanges like the CME or CBOT. It is necessary for managing futures contracts, manage margin requirements, and also access different trading tools. This ensures market security.

How is margin trading related to futures?

In margin trading, the trader can trade future contracts with the help of a fraction of the contract value. It acts as collateral. The margin increases the chances of profit, but the risk increases as well. Brokers in the USA are regulated by NFA and CFTC. It ensures complete compliance with the margin requirements.

Arjun Remesh
Head of Content
Arjun is a seasoned stock market content expert with over 7 years of experience in stock market, technical & fundamental analysis. Since 2020, he has been a key contributor to Strike platform. Arjun is an active stock market investor with his in-depth stock market analysis knowledge. Arjun is also an certified stock market researcher from Indiacharts, mentored by Rohit Srivastava.
Shivam Gaba
Reviewer of Content
Shivam is a stock market content expert with CFTe certification. He is been trading from last 8 years in indian stock market. He has a vast knowledge in technical analysis, financial market education, product management, risk assessment, derivatives trading & market Research. He won Zerodha 60-Day Challenge thrice in a row. He is being mentored by Rohit Srivastava, Indiacharts.

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