Best Futures Brokers

CHAPTER

04

Best Futures Brokers [2020]

Choosing the right futures brokers that meets your level experience and needs is essential to becoming a successful trader. Make sure to spend ample time evaluating brokerages and your needs as a trader. 

What is a Futures Broker?

A futures or commodity broker is a business who executes orders to buy or sell futures contracts on behalf of their clients and charges them a commission for the transaction. 

Types of Futures Brokers

Ultimately Futures Brokers fall into two categories:

Brokers for Professional Traders
Professional traders care about two things, speed of execution and commissions. As a professional trader for over 15 years, my needs are going to be much different than someone who is just getting into trading.

Some brokerages focus on these two items while putting less emphasis on things like education.

Brokers for New Traders
New traders primarily care about education and look for platforms that are easy to learn. Brokerages who cater towards the new trader or investor are going to put a lot more resources into education and support for new traders. Those resources cost money and as a result you will typically see higher commissions.

About Our Futures Brokers Reviews

I’ve been trading professionally for over 15 years and I am NOT being compensated in any manner by any of the charting software companies reviewed here.

Thus, you’re about to read a truly unbiased review from a professional trader based on what I believe are the strengths and weaknesses of every futures broker. Then it’s up to you to decide what’s best for your level of experience and needs.

Every futures broker reviewed here is a great broker I would recommend or I wouldn’t bother reviewing them. It really comes down to your experience and needs. The best broker option for you now may be different than 6 months down the road as your needs change.

One component I left out of our review process is charting platforms provide by brokers. I view and brokers as two entirely separate topics. The best charting software is typically provided by a 3rd party. To this day I have never seen a brokerage’s charting packages even come close.

Futures Brokers Review Scoring

There’s several components we considered when reviewing the best futures brokers. If you’re evaluating any other broker not reviewed here today you’re going to want to take all of these key factors into consideration.

All components are scored on a scale of 1-5 (5 being best) or 1-10 (10 being best) depending on their importance.

Commissions – 1-10 Points: Commission structures and rates are the most important thing to evaluate when looking at brokers. Why? Because it determines your costs of doing business and what you will have in your account at the end of the day.

Platform & Tools – 1-5 Points: Ever broker as their own set of tools and platforms. Finding a balance between the right tools and ease of use when executing orders is essential.

Products – 1-5 Points: Some brokers specialize in particular products like Futures or Options while others offer multiple products. 

Innovation – 1-5 Points: It’s imperative your brokerage keeps up with the times as new tools, products, order types, and other technologies come into the market.

Security – 1-5 Points: Based on a broker’s capital position, balance sheet and automated risk controls.

Education – 1-5 Points: Education is for new traders. Professional traders will put less emphasis on this component.

Additional Components

The following components each account for one point if the charting platform includes the component.

  • Banking
  • Mobile Application
  • Paper Trading
  • Trade Journal
  • Desktop OS
  • Free Demo

SO…We’ve crunched the numbers… without further ado here’s how we rank the best future brokers for 2020. 

Best Futures Brokers [2020]

Interactive Brokers Review

Interactive Brokers Review

Website: https://interactivebrokers.com/
Minimum Account Size: $10,000
Commission: $0.25 – $0.85 per futures contract per side depending on volume
Score: 37 of 41 Points

Topping off our list of the best futures brokers for 2020 is Interactive Brokers. Had a reviewed these brokers when I began my career in 2003, IB would have been at the top every year.

IB has always ran their company conservatively and I know my money is safe at the end of the day. Interactive’s equity capital exceeds $8.1 billion, over $6.0 billion in excess of regulatory requirements. 

Pair that with some of the most competitive commissions in the industry and a huge selection of products to trade and you have the best Futures Broker in my opinion.

Best For:
-Professional Traders
-Trading multiple security types and markets

Pros:
-Great commission pricing
-Well capitalized
-Huge number of products to trade

Cons:
-Platform can take some time to learn

Interactive Brokers Score Break Down

Commissions: 7 of 10

Platform/Tools: 5 of 5

Products: 5 of 5

Innovation: 5 of 5

Security: 5 of 5

Education: 4 of 5

Banking: Yes

Mobile App: Yes

Paper Trading: Yes

Trade Journal: Yes

Desktop OS: Windows & Mac

Demo: Yes

Commissions:7 of 10
Platform/Tools:
5 of 5
Products: 5 of 5
Innovation: 5 of 5
Security: 5 of 5
Education: 4 of 5
Banking: Yes
Mobile App: Yes
Paper Trading: Yes
Trade Journal: Yes
Desktop OS: Windows & Mac
Demo: Yes

Total Score: 37

TD Ameritrade Review

TD Ameritrade Review

Website: https://www.tdameritrade.com/
Minimum Account Size: $2,000
Commission: $2.25 per futures contract per side
Score: 32 of 41 Points

Coming in second on our list is TD Ameritrade and their ThinkOrSwim platform. TD Ameritrade offers the best education for new traders out of the brokers reviewed today.

They’re also well capitalized and offer a ton of different products to trade. 

While they do come in second place on our list, I believe the only people who should consider TD is new traders. Why? Because their commissions are high, plain and simple. They’re a great place to begin your career but eventually you will want to move to a brokerage with better commission structures. They’re commissions on futures are over double than any other broker reviewed in our list.

Best For:
-New Traders
-Trading multiple security types and markets

Pros:
-Huge number of products to trade
-Superior education
-Easy to use platform (best for new traders)

Cons:
-High Commissions

TD Ameritrade Score Break Down

Commissions: 1 of 10

Platform/Tools: 5 of 5

Products: 5 of 5

Innovation: 5 of 5

Security: 4 of 5

Education: 5 of 5

Banking: Yes

Mobile App: Yes

 

Paper Trading: Yes

Trade Journal: Yes

Desktop OS: Windows & Mac

Demo: Yes

Commissions: 1 of 10
Platform/Tools:
5 of 5
Products: 5 of 5
Innovation: 5 of 5
Security: 4 of 5
Education: 5 of 5
Banking: Yes
Mobile App: Yes
Paper Trading: Yes
Trade Journal: Yes
Desktop OS: Windows & Mac
Demo: Yes

Total Score: 31

Discount Trading Review

Discount Trading Review

Website: https://www.discounttrading.com/
Minimum Account Size: $2,000
Commission: $0.15 – $0.50 per futures contract per side depending on volume
Score: 25 of 41 Points

Tied for third place is what I would consider a discount broker (they chose a great company name) Discount Trading. 

I consider them a discount broker as they really only focus on trade execution and commission cost by keeping their overhead low which means you won’t see a fancy in house trading platform or great education.

Discount is tied for the best commissions out of all the brokerages in our list. If your purely a futures trader and have some experience I would highly recommend Discount Trading.

Best For:
-Futures
-Professional Traders

Pros:
-Great commission rates
-Large variety of 3rd party charting options

Cons:
-Less education
-Fewew products to trade

Discount Trading Score Break Down

Commissions: 10 of 10

Platform/Tools: 2 of 5

Products: 3 of 5

Innovation: 3 of 5

Security: 3 of 5

Education: 3 of 5

Banking: No

Mobile App: No

 

Paper Trading: No

Trade Journal: No

Desktop OS: NA

Demo: No

Commissions:10 of 10
Platform/Tools:
2 of 5
Products: 3 of 5
Innovation: 3 of 5
Security: 3 of 5
Education: 5 of 5
Banking: No
Mobile App: No
Paper Trading: No
Trade Journal: No
Desktop OS: NA
Demo: No

Total Score: 25

Optimus Futures Review

Optimus Futures Review

Website: https://optimusfutures.com/
Minimum Account Size: $2,500
Commission: $0.15 – $0.50 per futures contract per side depending on volume
Score: 25 of 36 Points

Optimus Futures comes in tied in third place with Discount Trading.

Once again Optimus is another discount broker with great commission rates. You’re going to find very few difference between Optimus and Discount. I would choose one over the other based on what you’re looking for in margin or what 3rd party charting software you’re looking to use.

Again, another great broker for serious traders who don’t need all the bells and whistles a newer trader may be looking for.

Best For:
-Futures
-Professional Traders

Pros:
-Great commission rates
-Large variety of 3rd party charting options

Cons:
-Less education
-Fewer products to trade

Optimus Futures Score Break Down

Commissions: 10 of 10

Platform/Tools: 2 of 5

Products: 3 of 5

Innovation: 3 of 5

Security: 3 of 5

Education: 3 of 5

Banking: No

Mobile App: No

 

Paper Trading: No

Trade Journal: No

Desktop OS: NA

Demo: No

Commissions:10 of 10
Platform/Tools:
2 of 5
Products: 3 of 5
Innovation: 3 of 5
Security: 3 of 5
Education: 5 of 5
Banking: No
Mobile App: No
Paper Trading: No
Trade Journal: No
Desktop OS: NA
Demo: No

Total Score: 25

Choosing the Right Futures Broker

I want to reiterate that I have been professional trading for over 15 years and would be happy with any of the futures brokers reviewed here today. You simply have to pick what platform best trading style and needs.

Prior to picking a broker, I would hone in on your strategy and what charting software you plan on using and then find a broker that supports your charting package.

As you progress as a trader the only things you will likely evaluate when it comes to brokerages are speed of execution, commission rates, and security.

Conclusion

Becoming a successful trader requires you to choose a broker that aligns with your trading and investing goals. Picking the right futures broker that aligns with your needs can mean the difference between frustration and success. 

No matter your experience level, all the brokerage firms highlighted in this chapter deserve your evaluation. 

Let us know your experiences with any of the brokerages discussed in this chapter or others in the comments below!

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CHAPTER

05

Futures Trading Strategies

Coming Soon

CHAPTER

06

Trading Plan

Coming Soon

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