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How to Identify the Best Futures Broker for You

| March 8, 2024 | By

The futures markets are dynamic, ever-evolving environments. Securing the services of a competent brokerage firm is a necessity when attempting to navigate the ultra-competitive arena of active futures trading.

Selecting the best futures broker for your needs can be a complicated task. In addition to low commissions and eager customer support, many trade-related factors must be addressed when identifying the broker most suitable for your situation. With so many choices available, deciding upon the best option for your specific needs and resources is crucial to approaching the marketplace from a position of strength.

In order to be classified as truly competent, futures brokers must be able to satisfy the requirements of several unique areas:

  • Trustworthy and reliable
  • Technologically proficient
  • Dedicated customer service

Trading futures successfully in the contemporary digital marketplace requires equal parts dedication, tenacity, and know-how. While a trader must supply the desire and stick-to-it-iveness, a competent broker can bring a variety of assets to the table.

Trustworthy and Reliable

Adhering to established regulatory requirements while placing the client’s best interests at the forefront of operations should be the primary goal of a brokerage service. In order to determine whether a firm is upstanding and worthy of your business, a few basic characteristics must be present:

  • Current Registration: The U.S. Commodities Futures Trading Commission (CFTC) requires all futures commission merchants (FCMs) and introducing brokers (IBs) to be members of the National Futures Association (NFA). The NFA is a self-regulatory body that enforces the financial and reporting guidelines of member firms. If a broker is not NFA certified, then further due diligence is necessary.
  • Reputation: A solid reputation is an important element of a brokerage firm. Outstanding lawsuits, client complaints, and allegations of fraud are often just the tip of the iceberg. If a brokerage service has a checkered past, or is new to the marketplace, it may be a good idea to research the firm thoroughly before becoming a customer.

If a broker has a good reputation within the industry and is currently satisfying regulatory requirements, then there is a good chance it is a reputable firm.

Technologically Proficient

The rise of electronic trading has created a need for advanced technological capabilities. A robust software platform is an absolute must, as is an existing infrastructure that promotes efficiency within the marketplace.

The best futures brokers are able to provide clients with the technology to compete with other market participants. Staying on the technological “lead lap” is crucial to achieving longevity in the marketplace. Here are several trade-related challenges that adequate technology can help properly address:

  • Excessive latencies
  • Advanced technical analytics
  • Optimal trade execution

Being able to enter and exit the market with maximum efficiency is a leading determinant of profitability in the trade of futures products. Dealing with a brokerage that provides clients low latency options, a comprehensive suite of technical tools, and optimal order execution is an integral part of being technologically proficient.

Dedicated Customer Service

Customer service is a core competency that all good futures brokers must have. Whether a trader needs assistance crafting trading strategies, answers to basic inquiries, or advanced tech support, access to a comprehensive service suite is an absolute must.

During market hours, being able to contact your broker is a critical component of customer service. Connectivity options to the trade desk via telephone or live chat on a 24/5 basis can be invaluable when troubleshooting technical issues or managing active positions.

In futures trading, lost time is often lost money. Being able to contact your broker quickly when faced with various challenges can be the key to preserving capital resources.

Getting Started

StoneX offers participants of all varieties a robust service suite based upon competency and integrity. StoneX has more than 25 years of experience in the futures industry, and its team has the knowledge and experience to help ensure your venture into the marketplace is a positive one.

Download the eBook: Futures and Options Strategy Guide