Futures and commodities trading is an essential piece of the American economy, allowing companies to manage costs by locking in prices in advance. And although the average investor tends to stay away from futures trading — and with good reason — there are more than a few brave souls ready to try their hand at the risky, high-speed world of futures and commodity trading.
Finding the best futures broker — commodities brokers that combine robust trading platforms with the lowest possible costs for online trading — isn’t always easy and means carefully comparing your needs to what’s on offer.
So, here’s a look at some of the best brokers for commodity trading to determine if they’re right for you.
Best Futures Brokers
Choosing the best broker for you involves balancing the costs of trading with the tools and research available to help you trade.
|Best Futures Brokers|
|Broker||Ideal For||Commission||Commission Basis||Minimum Balance|
|E-Trade||Best for more futures options||$1.50||Per contract, per side||N/A|
|Ally Invest||Low-cost brokers for futures trading||$0.45||Per contract, per side||$500|
|Charles Schwab||Best for education||$1.50||Per contract, per side||Case-by-case basis|
|TastyWorks||High volume traders||$1.25||Per contract, per side||N/A|
|Interactive Brokers||Best trading platform, research and tools||$0.85||Fixed rate, per contract, per side||$10,000|
|Rates are accurate as of Aug. 29, 2018.|
Brokers tend to charge commissions on a per-contract, per-side basis, meaning that they charge commissions both to open and close your positions and the more-accurate “round trip” costs will be double the listed price — and include any additional exchange fees.
Best for: E-Trade is likely a good choice for someone looking for more flexibility.
Pros: The platform advertises pro-level tools to help you identify patterns necessary to a successful strategy, access to over 100 technical studies and a research center where you can get insight from seasoned professionals — all on the same basic platform you use to trade stocks.
Cons: At $1.50 per contract, per side, E-Trade is one of the pricier brokers for futures trading, so if you don’t love its suite of tools, you might consider other, lower-cost brokers.
Best for: Ally is good for people looking for the chance to trade futures contracts on a variety of goods across several exchanges.
Pros: Ally’s platform allows you to view over 100 technical indicators on its charts. You can also plan to stay on top of your strategy with customizable indicators and real-time alerts. The biggest draw for Ally Invest — for high-volume traders, at least — is the low commissions, with a price as low as $0.45 per contract, per side.
Cons: Although Ally advertises tiered pricing that can reach “as low as $0.45,” it is unclear what those tiers are or how many trades secure what rate, so you might ultimately wind up paying more in commissions.
Brokerage Fee Comparison: Where Will You Keep the Most Money?
Best for: Charles Schwab can be good for novice traders looking to get their feet wet.
Pros: With live assistance from futures specialists and no fees for broker-assisted trades, Charles Schwab could be one of the better brokers for beginner futures traders. And even for the more advanced trader, the StreetSmart Trading Platform touts access to over 40 trading tools and a variety of charts and research you can use to plan your trades.
Cons: Like E-Trade, Schwab charges $1.50 per contract, per side, for futures trading, which will most likely add up for the more active trader.
Best for: TastyWorks is likely going to be the best option for veteran, knowledgeable traders who know what they’re looking for and want a major volume discount.
Pros: TastyWorks caps commissions on trades, setting a maximum commission that could save a lot of money for high-volume traders moving hundreds of contracts at a time.
Cons: TastyWorks doesn’t necessarily appear to be one of the more competitive discount brokers in terms of its trading costs at $1.25 a contract, but with the cap on commissions on trades, it might not be as bad as it seems. If your commissions aren’t regularly being reduced by that hard cap, however, you might want to consider other brokers that are better suited to your trading volume.
Best for: Interactive Brokers is a low-cost option for investors looking to save on extra costs, especially with the tiered pricing structure.
Pros: If you opt for the tiered pricing structure, you can take advantage of discounts that come with large orders. Even if you don’t, the flat $0.85 per contract, per side, is more than competitive with the other options on this list. With the tiered pricing, your costs can fall to $0.25 per contract, per side, when you trade 20,000 contracts per month or more. Those low trading costs also come with access to a trader platform that allows you to trade futures through the same portal as other asset classes and has a suite of tools to help you identify and execute trades.
Cons: To open a Trading Group Masters or Broker Masters account, you need a $10,000 deposit.
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