High volume traders in particular benefit from brokers with superior execution speeds and robust customer support, ensuring swift transactions and reliable assistance for complex issues. In the digital age, the scrutiny under which data encryption standards are placed is rigorous, especially when identifying the best futures brokers. These standards top 10 futures brokers form the bedrock of a broker’s cybersecurity framework, employing complex algorithms to encode data, thereby shielding it from unauthorized interception and access. A leading broker’s commitment to leveraging cutting-edge encryption technologies is a clear indicator of their dedication to securing client assets and sensitive information.
Best Futures Trading Platforms for May 2024
Sam Levine has over 30 years of experience in the investing field as a portfolio manager, financial consultant, investment strategist and writer. He also taught investing as an adjunct professor of finance at Wayne State University. Sam holds the Chartered Financial Analyst and the Chartered Market Technician designations and is pursuing a master’s in personal financial planning at the College for Financial Planning. Previously, he was a contributing editor at BetterInvesting Magazine and a contributor to The Penny Hoarder and other media outlets.
Goldco: Best for Buying Gold
A balanced and diversified portfolio helps to protect against one investment underperforming and may also smooth out the different levels of volatility. Within the stock market itself, there’s a wide variation in risk and returns. Government bonds or ‘gilts’ are considered low-risk investments and currently offer a return or ‘yield’ of 1-2% (based on their current trading price). There are several reasons why the commodities market is so highly volatile, and as we mentioned already, supply and demand are the first factors to consider.
Tools & Features
With low account minimums, fast account approvals and easy funding and withdrawals, Optimus Futures is an ideal solution for anyone interested in trading CME Group’s micro futures with free platforms and low margins. NinjaTrader has an amazing trading platform for those just beginning their trading https://www.trading-market.org/ careers as well as for advanced traders. Its extensive collection of technical analysis tools is perfect for beginners utilizing a demo account, and it even offers a 2-week free trial when you register. The investing information provided on this page is for educational purposes only.
Plus500 – A streamlined commodity trading experience
This allows BCD to offer investors well diversified exposure to the physical commodities market for a relatively cheap 0.3% expense ratio. They give XLE a cross section of equities in the oil, gas and consumable fuel, energy equipment and services industries. They consist of such familiar names as integrated oil and gas giants Exxon Mobil (XOM) and Chevron (CVX) as well as oilfield services provider Schlumberger (SLB) and pipelines titan Kinder Morgan. While the Energy Select SPDR Fund does not hold commodities directly, it offers investors indirect exposure to energy via an allocation to the largest oil companies. Our editors are committed to bringing you unbiased ratings and information. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally.
Do you understand the risks?
Most apps offer multiple channels for customer support such as live chat, email, phone, and social media. However, it’s important to make sure that customer service is available in your language and region, preferably 24/7, so that you can get help whenever you need it. While Plus500 is easy to use, it primarily focuses on CFD trading, which may not be suitable for all investment strategies. However, its unique +Insights tool provides valuable market trend analysis, which can enhance trading decisions.
The bottom line: Investing in commodities can be a great way to diversify your portfolio
These investments give you exposure to commodity gold, silver and other precious metals and let you feel the actual weight of your investments. But with precious metals, transaction costs are higher than other investments. For example, you might agree to a commodity future contract to buy 10,000 barrels of oil at $45 a barrel in 30 days. At the end of the contract, you don’t transfer the physical goods, but you close out your contract by taking an opposite position through the spot trading market.
They include the weather and geopolitical events, which may significantly impact existing trends and provide a catalyst for price action. Trading futures requires a funded online broker account with margin and futures trading approval. Once your account is approved, opened, and funded, research and determine which contract you want to trade, fill out the order ticket, then place your trade. Futures markets were originally established to help farmers and other commodity traders manage business risks. Commodity trading brokers are also often referred to as “commodity trading platforms”.
You can read more about our editorial guidelines and our products and services review methodology. Actively-managed ‘collective’ investments pool together money from investors to be invested by a fund manager on their behalf. They charge a higher fee as the fund manager aims to outperform an index such as the FTSE 100. You can usually buy ‘income’ or ‘accumulation’ units if you’re buying a fund-based investment.
Investors in the commodity market aim to profit from supply and demand trends or reduce risk through diversification by adding different asset classes to their portfolios. Here you will find our best commodity brokers, based on thousands of hours of extensive research, testing and analysis across hundreds of brokers. Upon conclusion of each of our broker reviews, we have assigned each broker with a rating. Other factors to consider are margins and leverages, platform features and device compatibility, and whether you can afford the fees charged by the broker.
- These platforms typically provide real-time market quotes, price charts, and other market data, empowering traders to make informed decisions.
- The best commodity apps allow traders and investors to access global commodity markets and trade valuable commodities like precious metals, energies, agricultural products, and digital currencies.
- The main ways to trade through a commodities broker are via futures, options, ETFs, and other assets.
- Moreover, IBKR’s trading technology is among the best of all online brokers.
- For oil, you could buy the stock of an oil refining or drilling company; for grain, you could buy into a large agriculture business or one that sells seeds.
- The way this works is you enter into an agreement with another investor based on the future price of a commodity.
There is a $0 ($100 Interactive Advisors automated accounts) minimum to start investing with Interactive Brokers. Besides commodities, its product portfolio includes stocks, bonds, ETFs, mutual funds, options, and futures. Its mobile trading app, Schwab Mobile, allows customers to execute trades and access their portfolio balance, holdings, and statements. Choosing the right commodities broker is crucial for success in the market. TD Ameritrade, Interactive Brokers LLC, IG US and eToro are some of the best commodity brokers in the U.S., each offering unique features and capabilities that cater to different types of traders and investors. While there are many options available for trading futures, the decision on which platform is best depends on your trading style.
The commission for trading an E-micro contract or an option on a micro is only a quarter, and Trader Workstation is almost infinitely tweakable, loaded with tools, data, research, and news. Unfortunately, I find setting up a layout on Trader Workstation that works for me to be needlessly frustrating. Happily, IBKR seems to understand that many traders want a simpler workspace, so it’s in the process of rolling out a new and aptly named IBKR Desktop app. Before making any trades, you need to carefully understand the commodity price charts and other forms of research. Since market price moves can lead to large gains and losses, you need a high risk tolerance as well, meaning you can stomach short-term losses in pursuit of long-term gains.
Traders who rely on technical analysis will find TradeStation’s tools invaluable. The platform offers in-depth charting capabilities, customizable indicators, and automated trading options. For those who thrive on data-driven decision-making, TradeStation is a compelling choice. Goldco is one of the industry’s most trustworthy gold investing firms, with an A+ from the Better Business Bureau and a history of great customer support services. Another perk is that Goldco charges lower fees on greater asset amounts than some competitors.
NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments. One of AvaTrade’s strengths is its dedication to helping traders develop their skills. Through educational resources, webinars, and market analysis, traders can stay informed and make confident decisions.
Unlike a margin loan to buy stock, futures margin is a deposit against potential losses rather than a loan. Use the broker comparison tool to compare over 150 different account features and fees. Since 2009, we’ve helped over 20 million visitors research, compare, and choose an online broker. Our writers have collectively placed thousands of trades over their careers. With two decades of business and finance journalism experience, Ben has covered breaking market news, written on equity markets for Investopedia, and edited personal finance content for Bankrate and LendingTree. There are a few different ways to trade commodities in your portfolio, with their own advantages and disadvantages.
NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.