Choosing an Online Futures Broker

Picking an Internet futures broker is one of the most important trading decisions you’ll ever make. But as the number of brokerage firms offering online futures and options trading continues to mushroom, the choices are dizzying. So which one is right for you?

Our simple advice is to go with an online futures broker that is strong in a number of important areas and that represents a solid, overall value. In keeping with the notion that an educated consumer is the best consumer, we’ve compiled the following list of tips to help you in your search for the right online futures broker. When you choose XPRESSTRADE, you’re choosing the broker committed to delivering the best possible online futures trading experience!

1. There’s a lot more to consider than just a cheap trade.

   True, price is important, but it should be one of your last considerations (see Tip 10). Brokers should be ranked in a number of categories–including trade execution, breadth of features and services, customer support, ease of use, reliability, and commissions–and you should use an overall score to home in on the right online broker. At XPRESSTRADE, we believe that most people don’t wish to do financial transactions through a bargain-basement company, because they understand that to some extent, you get what you pay for. So, we try to give our clients a great overall value. We offer an honest company with a good reputation that can be trusted. We give you a fast, reliable, easy-to-navigate system with a wide variety of features. We provide what we believe to be the brokerage industry's most responsive customer service. And we deliver all this at a very reasonable price, so that you get a fair deal each time you trade.

2. Pay attention to trade execution.

   It’s important that you understand how your broker treats your orders after you press the Submit key, and it’s equally important that you understand how your broker will return your fill confirmation. Some brokers have amazingly clumsy trading screens. Some don’t provide you with a real-time quote on the order confirmation page. Some require a human broker to review trades prior to sending them to the trading pit, which will slow the execution. Unbelievably, several brokers even make you wait a day to see an account status report which reflects your trades. At XPRESSTRADE, we’ve solved these problems: We give you a variety of order entry choices, including the ability to send contingent orders. We provide you with unlimited, free real-time quotes. We’ve developed XPRESS Futures Order Routing, which sends many of your orders right to Globex2 or electronic broker devices in the trading pits (where available) and zips your fills back within seconds. You’ll get real-time, marked-to-the-market Dynamic Account updates, letting you know exactly where you stand at any given moment. And, E-mail notification each time there’s activity in your account is standard at XPRESSTRADE.

3. The more tools and information at your fingertips, the better.

   Can you get quotes, charts, news, analysis, and other tools? XPRESSTRADE gives you one of the futures industry’s most powerful arsenals of tools and information. Free, unlimited access to real-time futures and options quotes for every accountholder, including Dynamic Quotes, our streaming, personalized quote watch product. Free Java-powered, Interactive Charts for all clients. Free historical charts by FutureSource. Real-time, breaking news from FWN, conveniently organized by keyword, totally free-of-charge. Dynamic Account Updates, showing marked-to-the-market positions and money balances. Contingent order entry. In-depth research from experienced market professionals. And much more. We give you all the tools and information you need to be successful in the futures market.

4. Real-time is the best time.

   Not to beat a dead horse, but this is truly important. It doesn’t make much sense to trade via the Internet if your broker doesn’t emphasize a real-time trading environment. While nearly all online futures brokers will charge you for real-time quotes, that isn’t the case at XPRESSTRADE. We’re registered as an authorized quote vendor, so we provide unlimited, free real-time quotes to all accountholders throughout our website, including Dynamic Quotes, our real-time, tick-by-tick quotewatch product. Many brokers provide end-of-day account statements from the previous close of business. But at XPRESSTRADE, we update positions, money balances, and margin requirements in real time, so you always know where you stand. Everything we do takes advantage of our electronic medium. Isn’t this the way it should be?

5. You should be able to trade when it’s most convenient for you.

   In the futures markets, timing is everything. When a significant economic report or political event causes the markets to move overnight, when you’d like to trade foreign markets around the world, or when the hours most convenient to you–say, midnight to six in the morning–aren’t necessarily the most convenient for others, having a 24-hour futures broker can be critical. You need a broker that offers access around-the-clock customer service and access to the markets. At XPRESSTRADE, we’re always open, offering 24-hour access to major futures markets throughout the world.

6. You should have the world in the palm of your hand.

   If you’re a serious futures trader following markets around the world–or if you happen to reside in a country outside the United States and are interested in trading at exchanges closer to where you live–you need an online broker with global reach. Many U.S. brokerage firms offer limited access only to U.S. futures exchanges, ignoring many of the newer exchanges flourishing around the world. XPRESSTRADE gives you the opportunity to trade futures and options listed at a number of major futures exchanges worldwide, 24 hours per day. Whether you’re a French national interested in trading the Singapore markets, an Australian interested in trading grains during the Chicago Board of Trade’s Project A overnight session, a Brazilian fond of trading stock index futures at night on the Chicago Mercantile Exchange’s Globex2 system, or an American looking to trade the German Bund at EUREX, we can accommodate you. It doesn’t matter where or when you want to trade–the world’s leading futures exchanges are at your fingertips as an XPRESSTRADE accountholder.

7. Demand responsive customer service.

   In chat rooms around the Net, the most common complaint about online brokers is that they typically provide slow, unresponsive replies to customer questions. You can nip this problem in the bud by checking out your broker’s attitude about customer service before you need to depend on it. Are there 800 numbers and e-mail addresses that you can use if you need help? Can you reach a real, live, knowledgeable human being who can assist you? How long do you have to wait on hold? At XPRESSTRADE, we pride ourselves on delivering the fastest, most helpful support in the futures business. All of our representatives are experienced, cheerful professionals who are dedicated to doing all in their power to assist you. We don’t make you talk to computer voices, and we don’t allow your e-mail messages to sit around for hours before responding.

8. A well-designed and easy to use system will make your life easier.

   How easy is it to navigate around your broker’s site? Does the layout of the site make sense and minimize the number of mouse clicks it takes to get from one place to another? Some online brokers do not make information readily accessible, and others are so graphic-intensive that you waste enormous amounts of time waiting for pages to load. XPRESSTRADE’S website has been designed to be clean, fast, and simple to use. We’ve studied client usage patterns to help us add useful links from one page to another. Where possible, we allow you to customize the pages you view. And in some cases, when you click to an order entry screen, you’ll find a partially-completed order awaiting you.

9. Ignore reliability at your peril.

   Many online brokers will tell you that their systems are perfectly dependable, but the reality is that systems do crash. Machines and software which are pushed as hard as they are in the online brokerage industry will occasionally fail. What has your broker done to minimize such outages? What are the broker’s emergency back-up procedures when the inevitable happens? At XPRESSTRADE, we've invested heavily in redundant, state-of-the-art hardware systems made by leading manufacturers. All of our software applications undergo rigorous testing prior to implementation and are supported by our in-house staff of programmers and technicians. We maintain multiple Internet connections through several Internet Service Providers to minimize the likelihood of connectivity lapses. And finally, XPRESSTRADE maintains a staff of customer service representatives in Chicago who are ready and willing to assist you over the telephone in the event you are unable to reach us via the Internet, whatever the reason. There’s a lot to think about, and it’s important that you feel comfortable that your broker’s done its homework in this area.

10. Now it’s time to think about price.

    OK, after taking everything else into consideration, it’s finally time to investigate price. The rock-bottom commission rates advertised by many futures brokers often only apply to the largest accountholders who maintain a minimum level of equity in their accounts. Or it may apply only to "hyperactive" daytraders who move in and out of the market repeatedly each day and make x number of trades per month. Nasty surprises may be lurking on the fee schedule, too–all kinds of fees which further raise your trading costs. So be sure that you understand a broker’s commission and fee structure prior to opening an account. At XPRESSTRADE, we want you to feel as though you get a fair deal each time you trade, so we’re upfront and honest about price. Our standard commission rate is a deeply-discounted $11 per contract each way for futures market orders and $12 per contract each way for other futures orders (as is the case at most brokerage firms, you’ll also pay modest Exchange, National Futures Association, and floor brokerage fees). But better yet, we’re pleased to offer a unique commission rebate program–the more you trade, the lower your commission rate falls, even to as low as just $8 per contract for futures market orders! And, we try very hard to keep non-trading fees as low as possible–as an example, wire transfers of $2,500 or more can be sent totally free-of-charge, and T-Bills may be purchased in your account free-of-charge. Click here for additional commission rate information.