Interactive Brokers Futures Trading: Full Guide

Do Interactive Brokers offer futures trading?

IBKR Review

Yes. Interactive Broker is among the best trading platforms for futures trading globally.  Futures contracts are among the products that can be traded on Interactive Brokers, a comprehensive brokerage platform offering access to various financial instruments. Trading futures with Interactive Brokers entails a legally binding agreement to buy or sell a particular asset or security at a fixed price within a given window. 

By creating an appropriate account and using Interactive Brokers' trading platforms, like Trader Workstation (TWS) or WebTrader, traders and investors can participate in futures trading. On IBKR, traders can trade futures and futures options on a range of currencies (USD, EUR, CAD, etc.), E-micro Futures (MES, VOLQ, MYM, MNQ, MCL, MRB, 10Y, 30Y, MGC, 5YY, SIL, VXM, MHO), CME Cryptocurrency Futures, E-mini and E-Micro (by denomination) FX Futures, and Small Exchange Futures.

Furthermore, futures trading is available to traders in the US, UK, Mexico, Canada, China, Japan, and other European nations (Belgium, Hungary, Italy, France, Portugal, Poland, the Netherlands, Germany, Spain, Denmark, Sweden, etc.).

Interactive Brokers: Futures trading commission

Interactive Broker's commissions for future trading are low, with no added spreads, ticket charges, platform fees, or account minimums. The specific commission rate is determined by the volume of contracts traded within a given month. Also, the asset you are trading determines the commission you will be paying. The commissions for trading futures of currencies like USD, GBP, CAD, and EUR are indicated in the table below.

How to trade futures with Interactive Brokers

Before you can start trading futures, you have to open an account that will be approved for IBKR's futures trading. As a result, if you do not already have one, you must first open an Interactive Brokers account. Go to the Interactive Brokers website and proceed with the account registration procedure. Choose the appropriate account type, which may offer options for margin trading. You must specify the type of trading permissions you require during the application process. So, specify that you need permission to trade futures.

There will be a waiting period while Interactive Brokers reviews and approves your account after you submit your application. The approval procedure could take a few days or a few weeks.

To start trading futures on IBKR, follow the steps below:

• You will need to fund your account after it is approved. Deposit into your Interactive Brokers account to ensure you have enough money for trading and to meet any margin requirements.

• Access the Interactive Brokers trading platform by logging in. You have the option to utilize Trader Workstation (TWS) for desktop trading or WebTrader for web-based trading.

• Navigate to the futures trading section of the trading platform. This is where you'll find information about available futures contracts, prices, and other relevant details.

• Decide which exact futures contract you wish to trade. You can place an order after deciding on a futures contract. Choose between initiating a long position (buying) or a short position (selling) and select the type of order (market order, limit order, etc.).

• Specify the quantity or number of contracts you want to trade. Furthermore, you might need to choose the month and year of expiration for futures contracts. Attempt to control your risk by establishing take-profit and stop-loss orders. When the market reaches a predetermined price, these orders automatically go into effect.

• Before submitting the order, review all the details to ensure accuracy. Confirm the order when you are ready to proceed. Follow your position on the platform going forward after the order is executed. Keep track of market movements and be prepared to adjust your strategy if necessary.

You can adjust your positions based on market conditions and your trading strategy. If you want to test your trading strategies without risking real money, use a demo account.

Futures contract trading example

Mr. A is interested in trading E-mini S&P 500 futures contracts. The current market price of one E-mini S&P 500 futures contract is $3,000, and he expects the price to rise soon. He logged into his Interactive Brokers trading platform account through the Trader Workstation (TWS).

He quickly located the section of the platform dedicated to futures trading and selected the E-mini S&P 500 futures contract from the list of available contracts. After specifying the quantity of E-mini S&P 500 futures contracts, he chooses the expiration date of the futures contract, reviews all the details of your order, and then submits the order.

Mr. A. can decide to exit the trade, navigate to the platform, and place a closing order. So, he can either take profits or cut losses based on his trading strategy.

Interactive Brokers Futures Fees

Interactive broker futures have variable commissions based on volume in addition to exchange, regulatory, and carrying fees. While the costs and charges for Interactive Brokers futures vary, if you trade in large volumes or add liquidity frequently, the IBKR tiered structure will benefit you. The same applies to markets outside of the US. Customers in the US who trade futures and options are offered two simple, cost-effective pricing plans by Interactive Brokers.

Fees to offset exchange and regulatory fees for trading E-Micro FX Futures, E-mini FX Futures, currencies (USD, GBP, CAD, EUR, etc.), CME Cryptocurrency Futures, and Futures Options paid by IBKR vary between the tiered and fixed plans. Exchange fees, regulatory fees, and overnight position fees are paid under the tiered plan, while the fixed plan incorporates exchange fees and regulatory fees. Small exchange futures include clearing fees.