How to Compare Futures Brokers

Trading futures can involve a significant degree of risk.

Futures brokers refer to brokers that allow individuals and firms to trade futures--legally binding contracts to buy or sell financial instruments or commodities in the future at a price agreed upon today by the seller and buyer. If you want to trade futures, you first need to compare different futures brokers and find one with whom you'd like to open an account.

Instructions

1. Identify the most popular futures brokers. You can find many ratings of futures brokers these days, However, many have been solicited by certain brokers and so their impartiality may be in question. Therefore, it is best to do the ratings yourself. Follow the steps below to compare brokers on different criteria.

2. Look at the range of futures and other products futures brokers offer. Find out what commodity futures exchanges your broker offers (for example, Chicago Mercantile Exchange). All good brokers should also allow you to trade currency futures. The greater the range of instruments offered, the better the broker is on this criteria.

3. Compare commissions and minimum accounts. Your ideal broker should have the smallest commissions on offer. Also, different brokers require different amount of the minimum deposit required to open a trading account. These amount typically vary from $2,000 to $10,000.

4. Compare reliability and reputation.You can do that by researching this topic online. Check out blogs, "scam reports", forums, financial press and newspapers. Pay close attention to information from reliable sources such as Bloomberg, Reuters, or national newspapers like the Wall Street Journal.

References

• Futures Brokers Comparison
• http://www.deepdiscountfutures.com/