Online Futures
Trading - Which Software is Right for You?
There are two main types of
online futures trading platform: web based and software
based.
Web-Based Online Futures
Trading
With web-based online trading software you can trade futures from any computer that
has Internet access. Simply connect to the Internet and you are away! Trades
are made through a platform housed on a secure server of a futures broker's
website. No download or special set-up is required. Quotes are usually live
and free although you need to press a refresh button to update them. Streaming
quotes usually require a subscription fee, plus exchange fees that can vary
between $15 and $100/month per exchange. If you trade many different futures markets, you
may need to pay four or five exchange fees if you want streaming quotes or
live chart facilities. Simulated trading is usually available on a web-based
online trading platform.
Software-Based Online Futures
Trading
Software-based
online futures trading platforms are downloaded and
installed on to your own computer. You then use the
Internet to access your trading account, check its
balance, retrieve market quotes, place orders and obtain
the status on working orders, check for filled trades
and market positions. The software connects to the
internet so you trade online - but it must be on your
own computer. Many traders prefer this option. It is
easy to download the
software from the broker's website (usually about
5mb) and install it onto your PC. The only setup
required is to log-in using your unique username and
password.
Either option will encompass trading on all major
futures markets, including open outcry and
electronic/overnight markets (e.g. GLOBEX). You can
refresh your account balance to retrieve live
profit/loss. You will also be sent a daily account
statement. This can be posted or emailed - email is
certainly easier and speedier.
Even the most basic online trading platform should have
the ability for you to place multiple order entry modes,
for example, stop orders, limit orders, "or better"
orders, stop with limit orders, etc.
You should receive order fill prices in real-time. Fills are sent to your
screen via a pop-up fill notification box as
soon as the fill is received. In some instances, fills can be returned in 1-3
seconds. Some exchanges take longer than others. CME and CBOT fills are
usually received within several minutes of an entry/exit level being hit and
the order being filled. The New York exchanges are notoriously slow and you
may have to wait an hour or more to get your fill notification.
For ease of use, most online futures trading platforms use color-coding. For example,
buy orders are displayed in blue, while sells use a red font. Similarly,
market quotes use color-coding to indicate whether a quote is positive or
negative. The various order-entry modes are designed to fit various trading
conditions. For example, a user watching quotes for a given market can
instantly create an order by simply clicking on the quote once the market
reaches the desired price. Or, a user can easily summarize open positions and
liquidate any one of them by simply pointing to and then double-clicking on
the position in the position screen.
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Futures?
Futures and Options
Read our article describing the pros and cons of trading
futures with options
Online Futures Trading
An outline of the choices available when choosing an online
platform
Futures Trading Method
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