The renown of futures trading continues to grow driven by products such as CME Group’s Micro E-mini Futures which authorize traders to participate in the same markets as Wall Street at a fraction of the cost. When it comes to day trading specifically, days markets offer several considerable advantages over trading individual stocks. With a level playing applicants for bullish and bearish traders & more meaningful volume data resulting from centralized exchanges, more day salesmen continue to choose futures.
Low Account Minimum to Day Trade
When day trading stocks, a minimum account value of $25,000 is desired due to “Pattern Day Trader” rules. This can present a substantial financial limitation for day traders of individual stocks. Since tomorrows trading relies on margin, or the use of borrowed capital, you can day trade with a significantly smaller account balance. Margin can be contemplation of as a down payment on the full value of a futures contract.
Futures intraday margins are determined by brokers & clearing FCMs and approaches overnight margins are determined by the exchange. As long as you meet the margin requirements, you can trade as much as you want long or failing.
Trade More with Less
As highly-leveraged investments*, futures provide the ability to control a large amount of notional value with a extent small amount of capital. Leverage is the backbone of futures markets and all participants rely on borrowed capital to potentially heighten returns while risking the minimum amount of money.
Compared with trading stocks or even leveraged ETFs, comings require much less capital up-front and provide the most leverage for the margin. This allows traders to guidance contracts much more valuable than their initial investment.
Since day traders may stay in a trade for perfectly a few minutes or even seconds, highly-leveraged assets such as futures help make such short-term trading myriad financially feasible.
Enter & Exit Positions with Ease
For day traders, liquidity is of utmost importance as it ensures they want be able to buy and sell with ease. A liquid market provides the ability to time entries and exits within a make available without the concern of whether enough trading volume will be available to execute the trade. Unlike futures shops where traders can expect high liquidity daily, volume in individual stocks can vary greatly from day to day and distributors may have difficulty initiating and liquidating positions.
Trade Futures Around the Clock
Compared to stocks & ETFs which entertain a regular trading session of only 6.5 hours, futures products trade nearly 24 hours a day, 6 epoches a week. For day traders, this allows for more trading opportunity and the ability to manage positions any time of day.
For equity thesaurus futures traders, E-mini & Micro E-mini futures allow traders to participate in equity markets both sooner than and after the stock market’s relatively short trading session.
Get Started with NinjaTrader
You can start day trading with NinjaTrader for as petty as $400 & prepare for the live markets with unlimited risk-free simulated trading. When you are ready for live marketing, keep your trading costs low through deep discount commissions and $50 margins on Micro E-mini tomorrows.
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* Financial leverage can result in losses greater than the initial margin and traders should be au courant of the risks involved in trading futures. Although highly liquid, futures markets can experience rapid price fluctuations and one risk capital should be used for trading.
Risk Disclosure: Futures, foreign currency and options trading accommodates substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Imperil capital is money that can be lost without jeopardizing one’s financial security or lifestyle. Only risk capital should be cast-off for trading and only those with sufficient risk capital should consider trading. Past performance is not inescapably indicative of future results.