How Do I Choose A Futures Broker ?
What is Futures Broker
Futures Broker: Do you already trade Futures? Are you training for it? Are you not satisfied with your current broker, or have you had a bad experience in the past? Haven’t you decided on one yet?
We help you evaluate the aspects you should look at when choosing a specialized futures broker to work with.
Location and Regulation
As a first point and, perhaps, the most important, we must make sure that it is a serious, supervised, and regulated entity, stay away from financial stalls at all costs. Therefore, we would opt for a Spanish entity, supervised by the CNMV and covered by the Investment Guarantee Fund (Fogain), which guarantees up to €100,000 per holder in the event of bankruptcy.
On the other hand, being an entity in Spain resolves the issue of taxation since operations will report automatically, there are no additional obligations to declare assets abroad, and a local futures broker will know how to understand and adapt to our Spanish tax requirements. In time (deadlines) and form (information to report to the Treasury).
Futures Broker Commissions
The second point is obvious. We need low trading fees on the specific Futures we trade and transparency on all costs and conditions. For example, does the futures broker charge for real-time data on the futures markets I’m interested in? Usually yes, but some also discount said cost if you make a minimum of operations.
In this regard, Enrique Martí, the CEO of iBroker.es, tells us: “We are the only futures broker in Spain that offers, to all its clients, without exception and just by opening an account with us, free real-time with a depth of 10 positions in all CME Group futures: Nasdaq 100, Dow Jones, S&P 500, Gold, Oil, Currencies, and much more.
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The guarantees in the future is another of the most relevant issues since it determines the size of the capital that our account will require to carry out the operation that we have decided to carry out.
The futures day trader needs the tightest possible guarantees. Some futures brokers, to achieve this, handle two concepts, “intraday guarantees” and “closing guarantees,” which are higher. Therefore, if we are going to open and close the position on the day. Which has less risk in terms of very abrupt price movements, we can use that advantage in reducing guarantees, as long as the futures broker offers us a guarantee plan. reduced by intraday trading
It is also essential to be clear about the futures broker’s position closing procedure in an overdraft. What criteria will follow, when and in what order the positions will be closed in the event of a possible lack of balance. The latter must be crystal clear since although the guarantees will reduce. We must have enough credit to face potential losses.
Futures Trading Platforms
Suppose we do day trading in the future. In that case. We’ll need a solid online platform with excellent graphics to perform the necessary analysis and complex orders like OCO BRACKET orders. Which allow me to manage a position without being hooked to a screen all the time.
Having a good mobile app is also essential since we may need to close a position quickly. And also, some traders even operate almost exclusively with the mobile or tablet. So it is necessary that it works well and is easy to understand so as not to make mistakes that could cost us dearly.
Additionally, it is interesting that the futures broker offers integrations with other major platforms that may interest us in operating via TradingView, VisualChart, or Metatrader, for example.
Customer Service -Futures Broker
We must rigorously evaluate the customer service of the Futures Broker. What contact channels do they have and what hours, for general doubts about platforms or products. And in the event of doubt or complicated situation in any operation.
The channels must be accessible quickly, for example. By telephone. It is essential to promptly access an operator who attends to us and in our language. Other channels that should have an adequate quality of service can be chat, email, and, in some cases, even customer service via WhatsApp.
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