A Guide to Choosing the Right Futures Broker for You

As you probably know already, futures trading involves agreeing to a contract to buy or sell an asset at a set price in the future.

In other words, they can be used in bullish or bearish markets. Futures offer a way to trade a strategy or your view of the future price of an asset.

You can lock in (what you believe to be) a reasonable price today and (if all goes well and momentum is in your favor) sell or buy back to make a profit later on. Of course, it can backfire if you’re wrong, making it a risky business.

But this surface-level difference between futures and other kinds of trading isn’t the only thing that makes future brokers a little different.

One key difference is the fees structure. When you trade forex or CFDs, the commission involved is the spread between an asset’s sell and buy price. For futures, you’ll also pay a fixed commission per contract plus the exchange fees.

Since futures trading is so advanced, brokers are subject to tighter regulation; in the US, they must be regulated by the National Futures Association (NFA).

Plus, futures brokers are targeted at a more knowledgeable clientele than other financial products, meaning they’re less likely to have beginner-friendly resources or features.

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