Online Futures Trading

Online Futures Trading Explained

Online futures trading is a convenient way for both hedgers and speculators to trade in their chosen commodities.

There are many online brokers that exist solely for the purpose of trading commodity futures. Trading futures generally carries a little more risk than trading online stocks since you are betting how a growing season or the rates of crude are going to be priced, and many factors can suddenly affect those prices.

Most online brokerages require that you set up an account with a minimum deposit, and most charge a commission as well as a per market charge for your trades. A few online brokers require that you download their software in order to trade real time on their system, and other brokers give you access through a secure connection on your web browser.

Either system is convenient if you travel and carry your laptop or Blackberry with you. However, if you don't have portable technology, you might want to consider using a broker you can access through a secure browser connection so that you can check your trades, buy and sell as you see fit without having to download the software on any computer you use.

Some online brokers let you open practice accounts to learn not only how their particular online trading system works but to learn the nuances of futures trading itself. In your practice account, you are given a fake deposit amount that you can "trade" by buying and selling futures online just as though it were real money. If you make a bad choice and lose your "money" there is no real financial loss. Practice accounts are a great tool for learning to trade futures online without having to take a real risk.

After you practice a little and hone your futures trading skills, then you should be ready to jump into online futures trading.