Why Trade Futures?

Futures offer a fast, cost-effective way to trade financial and commodity markets. They are standardized contracts to buy or sell a particular asset at a set price, on a set date in the future, in predefined quantity and quality. Traders worldwide use futures to easily reduce risk or seek profits on changing markets.

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Benefits of Trading Futures

24-Hour Access
Trade nearly 24 hours/6 days a week when other markets are closed

Deep Liquidity
More participation in a market means tighter pricing, lower costs and tremendously efficient trading 

Transparency
See the same prices, quotes and trades as all other participants, fostering true price discovery

Leverage
Control a large contract value with a relatively small margin, giving more power to your capital

Diversification
CME Group is home to several global benchmarks used to set prices worldwide

Ease of Going
Short

Go short as easily as you go long, many times a day

How We Ensure Safety & Security

Every trade in our markets is CFTC-regulated, scrutinized and backed by CME Clearing to ensure market integrity. Every trade also must pass multiple safeguards before, during and after the trade takes place, further reducing risk.

Trade Across All Major Markets

How Do Futures Compare?

Futures offer many advantages over other popular ways of trading. Compare them side-by-side to see if futures are right for you.

Compare Futures vs. ETFs

Benefit

Futures

ETFs

Annual Management Fees

No

 

Yes

 

Potential Cost Efficiencies*

Yes
Can have significantly lower fees

Depends
Time horizon, direction & holding costs will impact

Nearly 24-Hour Access,
6 days a Week

Yes

No

 

Deep Liquidity

Yes

 

Yes
But core futures can trade many times more notionally per day

Pure Price Exposure
to Underlying

Yes
Designed to tightly track underlying

No
Funding levels, fees, other factors can affect price

 

Can Go to Delivery

 

Yes
But only a small percentage take delivery

No

Offers Portfolio Diversification

Yes

 

Yes

 

Tax Efficiencies**

Yes
Blended 60% long term, 40% short-term U.S. capital gains treatment

No
Could trigger relatively expensive short-term capital gains tax

Ownership

No
Only access value of commodity

Yes
You own until you sell again

* Depends on your time horizon, direction and holding costs

**Depends on holding period and time horizon. The information provided should not be considered tax advice. Consult your tax advisor before making any investment

Compare Futures vs. Forwards

Benefit

Futures

Forwards

Regulated, Centralized Market

Yes

 

No

 

Standardized Contracts

Yes
Quantity, quality, date

No
Privately negotiated

Level-Playing Field

Yes
See same quotes, trades, prices

No
Not transparent

Safety & Security

Yes
Centrally cleared

No
Bilateral counterparty risk

Compare Futures vs. Physical Commodities

Benefit

Futures

Physical Commodities

Regulated, Centralized Market

Yes
CFTC regulated; centralized trades

No
Independent brokers; often unregulated

Nearly 24-Hour Trading,
6 Days a Week

Yes

 

No, in many cases

Transparent Market

Yes
See same prices, quotes, trades

No, in many cases

Subject to Storage Costs

No

 

Yes

 

Cost Efficiency

Yes
Control a large value on margin

No
Full price paid

Favorable U.S. Tax Treatment*

 

Yes
Blended 60% long term /40% short term capital gains treatment

No
Ordinary income tax if held ≥ 1 year

Ownership

No
Trading on  value only

Yes
 

*The information provided should not be considered tax advice. Consult your tax advisor before making any investment

Compare FX Futures vs. Cash FX

Benefit

Futures

Cash FX

Liquidity & 24-Hour Access

Yes
$85B daily

Yes
$5.3T daily but highly fragmented globally

Regulated, Centralized Market

Yes
World’s largest regulated for FX

No
Face counterparty & execution risk

Level-Playing Field

Yes
See same prices, quotes, trade firm liquidity

No
Little to no transparency, last look commonly used

Fully Disclosed Fees

Yes
Plus known, universal margin requirements

No
Spreads often built into prices, varying margin/credit charges subject to counterparty

Safety & Security

Yes
Trades regulated, centrally cleared

No

 

Speed & Performance

Yes
Fast trade executions, confirmations & straight-through processing  

Depends
Speed bumps, last-look, re-quoting execution delays common

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