5 Important Factors to Consider While Choosing a Futures Trading Platform

By Team Newsable | First Published Aug 23, 2023, 7:16 PM IST

The right platform can help you to elevate your trades. It is important to select a platform based on research about what type of services they offer, brokerage and fees charged and other parameters. Here are 5 main factors that a trader needs to consider before choosing a futures trading platform.

In the era of the 70s and 80s futures trading used to take place physically at the Exchange. Traders would shout the buy price and sell prices to facilitate buying and selling. However, with the emergence of technology and online futures trading platforms, this has become easier.

With so many options available, selecting a futures trading platform can be difficult. The right platform can help you to elevate your trades. It is important to select a platform based on research about what type of services they offer, brokerage and fees charged and other parameters.

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In this blog, we will discuss 5 main factors that a trader needs to consider before choosing a futures trading platform.

1. Type of Future Broker

There are three different types of futures brokers in the market. They are Full-service Futures brokers, Discount Futures brokers and Online Futures brokers. Let’s understand each of them:

Full-Service Broker: Full-service brokers are more like traditional broking service providers and charge high brokerage. They provide full help in taking the right trading decisions.
Discount Futures Broker: Discount futures brokers are very cost-effective and are majorly based on electronic trading. They charge very low brokerage fees. Those who want to trade on their own and don’t require any assistance go for a discount futures broker.
Online Future Trading Broker: They are a mix of full-service brokers and discount futures brokers. You get good support and fees are nominal but higher than discount brokers.

2. Execution of Orders

When it comes to futures trading, the execution of trade matters a lot. If the futures trading account that you have can’t execute orders quickly it is of no use. Faster execution of trade can help you earn higher gains. In addition to faster execution, the platform should also allow the trader to place and modify orders with convenience.

3. Commission and Fees

Commission and fees charged by the broker shall be taken into consideration while choosing a futures broker. A futures broker will charge brokerage commission, annual maintenance charges, platform fees, etc. Try to compare these fees among different brokers and then take the final decision.

4. Proper Customer Support

Customer support is very necessary for futures trading. While trading or placing an order if you face any problem, you will need support. Thus round clock custom support as per your preferred choice such as calls, chats, etc. is very important.

5. Speed and Reliability

Speed is a very important part of futures trading. You need to see that the platform you choose offers good speed. Select the futures trading platform which has its own data feed and order routing rather than third-party services. This helps you to trade faster and in real time. You can also choose an online trading platform like Dhan to ensure you are on top of your trading.

Conclusion

Whether you are new to futures trading or are an experienced trader, you need to be cautious while choosing a futures trading platform. If you can operate on your own you can go for a discount broker. However, if you require assistance, you select a full-service broker or online broker. Do adequate research before making a decision.

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