Best Futures Brokers 2022

What is a futures broker?

A futures broker is a financial institution that provides direct market access to futures exchanges so that its clients can trade futures contracts. When trading futures, traders buy and sell futures contracts that give them the obligation to buy or sell a set amount of a specific asset at a specific date in the future. For a fuller explanation, please refer to our guide on futures trading.

Futures brokers in the UK

All futures brokers in the UK must be regulated by the FCA. You can check the status of what a futures broker is regulated to do on the FCA register. Most futures brokers will have an office or exposure to the London futures markets, as the UK offers one of the most robust financial infrastructures for trading futures.

The majority of UK futures brokers require clients to be classified as professional and have a clear understanding of the risks and mechanics of futures trading before they can have an account. The UK regulator, the FCA, requires all clients to either be classified as retail, professional, or ECP (Exchange Counter Parties). Retail clients tend to trade more accessible products such as financial spread betting or CFDs through a CFD broker, which often require smaller trade sizes. Futures brokers in the UK have their margin and trade size levels set by the underlying futures contracts, and the margin is set by the exchanges where the futures are traded.

The best futures brokers in the UK

You can compare the best futures brokers in the UK in our comparison table of futures brokers. In the comparison table, we highlight the main factors in determining what constitutes the best futures brokers. Namely:

• Cost of trading futures
• Futures exchange access
• Added value, such as research
• What accounts types are available

The best US futures brokers

Interactive Brokers is the best futures broker in the US based on our analysis. Even though Saxo Markets has won the award for best futures broker more often, Saxo Markets is not able to take on US clients. However, Saxo Markets can offer futures trading on US products to non-US residents.

US futures traders are not allowed to trade futures through a UK-based futures broker. US regulations require that US residents trade futures through US futures brokers. However, most UK-based futures brokers will have an office in the US and our comparison tables will redirect users to US futures broker entities if they are based in the US. UK futures traders are allowed to open futures trading accounts with US futures brokers. As with UK futures brokers, the same criteria for determining the best US futures brokers are the same. However, in the US, as there are no other derivatives products like spread betting or CFD trading, private (retail) traders are more likely to trade futures and options as a way to get leveraged exposure to the financial markets.

The difference between futures and options brokers

Futures brokers are often referred to as futures and options brokers, as futures brokers also provide access to the options markets. Options contracts are traded on the same exchanges as futures options. For example, a futures broker will provide access to FTSE futures as well as FTSE options. It is possible to trade futures and options strategies that offset the exposure of futures and options. For example, buying call options and selling FTSE futures to speculate on, or protect against volatility. For more information on options brokers, please refer to our guide on options trading or compare options brokers here.

Futures brokers CEO interviews

As part of our review process and featuring futures brokers, we have interviewed some of the CEOs of the largest futures brokers in the world. You can read these interviews here:

• Andrew Edwards – CEO of Saxo Markets UK
• Thomas Peterffy – CEO of Interactive Brokers
• Paolo Di Grazia – General Manager of Fineco
• Jerry Lees – Chairman Linear Investments

Fees charged by futures brokers

The main fees associated with futures trading are:

• Commission- this is charged on a per-lot basis for every lot traded.
• Exchange fees- this is a fee charged by the exchange that the broker either includes in the commission or passes on to the client.
• Foreign exchange- futures are settled in various different currencies, so if you are trading USD denominated futures and your account is in GBP, there will be a cost to convert USD P&L into GBP.
• Account interest- if you are running an account overdraft in either your base currency or other currencies, your account will be charged interest every day that it is overdrawn.

Discount futures brokers

A discount futures broker offers clients significantly reduced fees for online trading and algorithmic trading. For futures traders that trade in significant volume, futures brokers will reduce commission and the exchanges will also reduce exchange fees. Futures brokers are able to negotiate these discounts on behalf of their clients, based on the volume of trades that are placed.

Online futures brokers in the UK

All futures brokers offer online futures trading through either their own propriety trading platform or third-party platforms. Most futures trading is done online through futures brokers, although there is still demand for telephone-based futures broking, known as voice brokerage. Our comparison table of online futures brokers in the UK highlights which brokers offer voice and online trading, as well as prime and API access.

The best futures broker for scalping futures

When looking for a futures broker for scalping, the main thing to consider is costs and market access. Scalping is a type of trading where futures traders buy and sell quickly with the intention of taking advantage of small moves in bid-offer prices.

The best futures brokers for scalping will offer direct market access to the futures exchanges, so traders can work orders inside the market prices. Traders that are planning on scalping should inform their brokers of this so that they can negotiate lower trading costs, as the lower the cost of trading futures, the higher the returns on a scalping trading strategy will be. You can read more on why some brokers don’t allow scalping here.

E-micro futures brokers

E-micro futures are mini versions of full-size futures contracts. They were introduced to allow futures traders to have more control over their exposure by trading in small contract sizes. They are particularly helpful for smaller futures traders or beginners, as e-mini futures contracts require a lower margin and have less exposure to the markets. Due to their popularity over full size futures contracts, they are also more liquid contracts and are therefore more accessible to trade.

For example, the full size S&P 500 futures contract is worth $250 times the S&P 500 index, whereas the e-mini S&P 500 futures contract is worth $50 times the S&P 500 index.

Best futures brokers for beginners

Futures trading is a high-risk form of speculation and not suitable for complete beginners. If you are a beginner and looking for a futures broker, these are the main things you consider:

• Do you fully understand the risks?
• Do you have enough risk capital to diversify your exposure?
• If you do not have the relevant experience, you will be classified as a retail client and not allowed to trade futures.
• If you can demonstrate the relevant experience, you will be classified as a professional trader and your futures broker will not be obliged to explain how the markets work, and you will lose some of the protection the FCA offers retail traders.

Advantages and disadvantages of future contracts

Here is a brief summary of the main advantages and disadvantages of future contracts. Futures contracts in foreign exchange trading are different from currency forwards in quite a few ways. The first thing to realise is the a future is completely different to a forward. A currency forward is mainly used for hedging currency exposure whereas a future (especially in foreign exchange) is used predominant (nowadays) for speculating.

Here are the main advantages and disadvantages of future contracts versus forward contracts:

Advantages of trading futures contracts

• Futures contracts have very low margin.
• Futures contracts are on exchange so somewhat reduce counter party risk
• The cost for trading futures are very low compare to currency forwards.

Disadvantages of trading futures contracts

• Some brokers may insist clients close positions before delivery
• Trade in lots of preset amounts that are inflexible for exact accounting
• Mainly traded on US based exchanges
• Not as flexible for accounting purposes
• Mainly a speculative product
• They trade in large amounts that cannot be partially closed
• You need to be a professional trader to get the full benefits

Futures Broker FAQs:

How do you trade futures through a futures broker?

You trade futures by buying and selling futures contracts with the intention of letting the contract settle on expiry or closing a position beforehand to realise a profit or loss.

Can I trade forex without a futures broker?

Yes, you can trade forex through CFDs or spread betting.

Do futures brokers need to be FCA regulated?

Yes, all futures brokers that operate in the UK need to be FCA regulated.

How do you roll a futures position?

If you want to keep a futures position past expiry you roll the position into the next month by closing and opening existing and new positions at the same time.

What is a futures broker trading platform?

A futures broker trading platform is a website, desktop software or trading app that contracts traders to futures exchanges for the purposes of trading futures provided by a futures broker.

What is a commodities futures broker?

A commodity futures broker is a futures broker that provides access to commodities trading. You can compare commodities brokers in our commodities broker comparison table.

Which brokers provide access to CAC 40 futures?

You can compare brokers that offer access to the CAC 40 Frech equity Index in our comparison table of CAC 40 brokers.