{"id":924509,"date":"2021-06-09T12:34:14","date_gmt":"2021-06-09T16:34:14","guid":{"rendered":"https:\/\/www.finder.com\/ca\/?p=924509"},"modified":"2025-08-24T01:02:38","modified_gmt":"2025-08-24T05:02:38","slug":"futures","status":"publish","type":"post","link":"https:\/\/www.finder.com\/ca\/stock-trading\/futures","title":{"rendered":"A guide to futures trading in Canada"},"content":{"rendered":"<p>If you\u2019re new to investing, it\u2019s difficult to wrap your head around the many different assets you can trade. Stocks, ETFs and bonds are all relatively easy to understand, but some asset types are a little more complicated. So if you\u2019re wondering what futures trading is and how futures contracts work, you\u2019re in the right place.<\/p><h3>What are futures in trading?<\/h3><p>Futures are contract agreements between two parties. Those parties agree to buy or sell a particular underlying asset at a specified price on a nominated date in the future.<\/p><p>For example, a wheat farmer may be concerned that the price of wheat is set to fall before the next harvest. If they sell a futures contract for wheat and agree to deliver a certain amount of wheat at an agreed price on a specific date, they can protect themselves against potential price drops in the future.<\/p><h4>Is futures trading available in Canada?<\/h4><p>Yes, futures trading is available in Canada, but not on all online trading platforms. Most brokerages in Canada focus on providing stock and ETF trading for everyday investors. Trading futures comes with a high level of risk and is best suited to experienced investors, so futures are not widely available on stock trading platforms.<\/p><p>But the good news is that there are some online brokerages that offer futures trading in Canada.<\/p><h3>What is the best futures trading platform in Canada?<\/h3><p>The best futures trading platform in Canada for you depends on several factors. Your investing experience, the contracts you want to trade and how easy the platform is to use will all impact your choice of broker.<\/p><p>But if you\u2019re looking for some of the best futures trading platforms in Canada, Interactive Brokers is worth checking out. Interactive Brokers offers low-commission futures trading on global markets, with a host of advanced trading tools to help experienced users make informed trading decisions.<\/p><h3 id=\"compare\">Futures trading platform: Interactive Brokers<\/h3><div class=\"best-page\" id=\"best-page-975d70cea17f4df3a20b5979922c8032--196997435\">\n\n<style>.bestpage_infobox tr {display: flex; flex-direction: column-reverse; padding-bottom: 15px; background-image: url(https:\/\/www.finder.com\/finder-us\/wp-uploads\/2021\/02\/Finder-SitesLike-BlackBullet-20px.png); background-repeat: no-repeat; padding-left: 30px; background-position-y: 10px; } .bestpage_infobox th { border-bottom: 0 none #d5d9dc; width: auto; padding: 0; font-size: .9em; font-weight: 500; } .bestpage_infobox td { border-bottom: 0 none #d5d9dc; font-size: 1.2em; padding: 0; } .bestpage_card { border-width: .1em; border-style: solid; border-radius: .5em; .bestpage_card-promoted { border: #93c5fd; border-width: .15em; border-style: solid; 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margin: 0;\">\n<div class=\"u-grid\" style=\"margin:0;\">\n<div class=\"u-grid__col u-3\/4@m u-2\/3@s\" style=\"padding: 0.9rem;\">\n\n<div class=\"u-grid u-grid--alignMiddle\">\n<div class=\"u-grid__col u-1\/4@m u-1\/3\" style=\"padding-bottom:0.5em\">\n<center><a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/interactive-brokers-share-trading\" title=\"Read Interactive Brokers review\">\r\n\r\n  \r\n  \r\n\r\n<img decoding=\"async\" src=\"https:\/\/www.finder.com\/niche-builder\/67cb374726403.png\" loading=\"lazy\" alt=\"Interactive Brokers logo\" class=\"luna-image compare-logo no-lazyload \" width=\"450\" height=\"250\" srcset=\"https:\/\/www.finder.com\/niche-builder\/67cb374726403.png?fit=180 180w, https:\/\/www.finder.com\/niche-builder\/67cb374726403.png?fit=360 360w, https:\/\/www.finder.com\/niche-builder\/67cb374726403.png?fit=600 600w, https:\/\/www.finder.com\/niche-builder\/67cb374726403.png?fit=900 900w, https:\/\/www.finder.com\/niche-builder\/67cb374726403.png?fit=1200 1200w, https:\/\/www.finder.com\/niche-builder\/67cb374726403.png?fit=1350 1350w\" sizes=\"(max-width: 1350px) 28vw, 1350px\">\r\n<\/a><\/center>\n<\/div>\n\n\n\n\n\n<div class=\"u-grid__col u-3\/4@m u-2\/3\" style=\"padding-bottom:0.5em\">\n<p style=\"margin-bottom:0; font-size: 1.2em; font-weight: 700;\" id=\"975d70ce-a17f-4df3-a20b-5979922c8032\"><strong>\nInteractive Brokers\n<\/strong><\/p>\n<style>\n\ntable div[class*=\"methodology-partial\"] {\n    display:none;\n}\n\n\n.scoreCombined {\n  text-decoration: none;\n}\n\n.scoreCombined.finder-score::before {\n  display: none;\n}\n\na.scoreCombined,\na.scoreCombined:hover {\n  text-decoration: none;\n  white-space: nowrap;\n}\n\n.score__container {\n  display: flex;\n  width: 100%;\n  flex-flow: column nowrap;\n  align-items: center;\n  justify-content: center;\n  font-size: 20px;\n  gap: 4px;\n}\n\n.score__badge {\n  border-radius: 2px 24px 24px 24px;\n  border: none;\n  display: flex;\n  justify-content: center;\n  align-items: center;\n  height: 2.5rem;\n  width: 2.5rem;\n  background-image: linear-gradient(\n    45deg,\n    transparent 25%,\n    rgba(255, 255, 255, 0.2) 50%,\n    transparent 75%,\n    transparent 100%\n  );\n  background-size:\n    250% 250%,\n    100% 100%;\n  background-position:\n    -100% 0,\n    0 0;\n  background-repeat: no-repeat;\n  position: relative;\n}\n\n.score__badge--excellent {\n  background-color: #1d53ff;\n}\n\n.score__badge--great {\n  background-color: #008024;\n}\n\n.score__badge--standard {\n  background-color: #ffd23b;\n\n  .score__value {\n    color: #232320;\n  }\n}\n\n.score__badge--basic {\n  background-color: #db2420;\n}\n\n.score__badge:hover {\n  animation: shine-effect 1.5s ease;\n}\n\n.score__value {\n  color: #fff;\n  font-weight: 800;\n  font-size: 20px;\n  line-height: 1.25;\n  letter-spacing: -0.025em;\n  font-variant-numeric: lining-nums tabular-nums;\n}\n\n.score__text-wrapper {\n  border: none;\n  display: flex;\n  align-items: center;\n  top: -4px;\n  width: auto;\n}\n\n.score__text-wrapper.score__text {\n  background: none;\n}\n\n.score__text {\n  font-weight: 800;\n  font-size: 16px;\n  line-height: 1.25;\n  color: #232320;\n  font-variant-numeric: lining-nums tabular-nums;\n}\n\n.finder-score__text {\n  text-align: left;\n  text-wrap-mode: nowrap;\n  margin-left: 10px;\n  text-decoration: underline;\n}\n<\/style>\n\n\n\n\n<div class=\"detail-info 975d70ce-a17f-4df3-a20b-5979922c8032\" style=\"z-index: 1;position: relative; margin-bottom: 1rem\">\n  \n                  <p class=\"scoreCombined score__container finder-score\">\n      <span class=\"score__badge score__badge--excellent\">\n        <span class=\"score__value\">9.4<\/span>\n      <\/span>\n      <span class=\"score__text-wrapper score__text score__text--excellent\">\n        Excellent\n      <\/span>\n    <\/p>\n  <\/div>\n\n<\/div>\n\n\n<div class=\"u-grid__col u-1\/1 is-hidden@s is-visible\" style=\"padding-top: 1em; padding-bottom: 1em;\">\n<center>\n<style>\r\n.table--success { width: max-content !important; }\r\n<\/style>\r\n\r\n\r\n<div aria-hidden=\"false\" class=\"rewards--element-container rewards--container sticky-cta \" data-product-id=\"975d70ce-a17f-4df3-a20b-5979922c8032\" data-product-name=\"Interactive Brokers\" data-niche=\"Share Trading\" data-provider-name=\"Interactive Brokers\" data-rewards-campaign-name=\"\">\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n  \r\n\r\n\r\n\r\n\r\n\r\n      \r\n \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n  \r\n\r\n\r\n\r\n  \r\n \r\n\r\n\r\n\r\n \r\n\r\n  <\/div>\r\n<style>\r\n.hidden-temp {  overflow: visible; }\r\n.back-cover { display:none; width: 100vw; height: 100vh; background-color:rgba(0,0,0,.5); position: fixed !important; z-index: 10; top:0; left: 0; }  \r\n.card-t { position: fixed !important; z-index: 11; text-align: justify; display: flex; justify-content: center; width: 100%; top: 50%; left: 50%;  transform: translate(-50%, -50%); }\r\n.terms-c { color: #0271e1; z-index:3; } \r\n.terms-c:hover { color: #1591fe; cursor: pointer;}\r\n.terms-card-r { border-radius: 14px; }\r\n\r\n\r\n  \r\n@media (max-width:481px)  { \r\n\/* .card-t { position: fixed; width: 80%; text-align: justify;  top: 30vw; left: 5vh; }\r\n .card-t { position: fixed; z-index: 11; text-align: justify;  }*\/\r\n }\r\n<\/style>\r\n  \r\n\r\n  \r\n<script>\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n    document.addEventListener(\"click\", function(event) {\r\n        const sendDataButton = document.getElementById(\"sendDataButton\");\r\n\r\n        \/\/ Check if the click was on the sendDataButton\r\n        if (event.target && event.target.id === \"sendDataButton\") {\r\n            event.preventDefault(); 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\/\/ Get the category from the URL\r\n\r\n                \/\/ Construct the new URL with query parameters, encoding each value\r\n                const newUrl = `https:\/\/www.finder.com\/about-us\/product-lander-test?niche_data=${encodeURIComponent(nicheData)}&product_data=${encodeURIComponent(productData)}&fi_uri=${encodeURIComponent(fiUri)}&ps_uri=${encodeURIComponent(psUri)}&ps_gn=${encodeURIComponent(psGn)}&category=${encodeURIComponent(category)}&tc=${encodeURIComponent(tc)}`;\r\n                \r\n                \/\/ Perform the redirect with the updated URL\r\n                window.location.href = newUrl;\r\n            }\r\n        }\r\n    });\r\n});\r\n<\/script>\r\n\r\n  \r\n\n<\/center>\n<\/div>\n<div class=\"u-grid__col u-1\/1\">\n\n<div style=\"padding-top: 1em; padding-bottom: 1em;\">\nInteractive Brokers is a leading online brokerage that provides access to over 160 global markets. It has competitive commissions and provides access to a huge range of trading opportunities, including futures. And with advanced desktop and mobile trading platforms to suit experienced investors, it offers all the tools you need to start trading futures in Canada.<p><strong>Why it's one of the best:<\/strong><\/p><ul><li><strong>Wide range of markets.<\/strong> Interactive Brokers lets you trade futures on commodities, indices, interest rates, currencies and cryptocurrencies across more than 30 exchanges around the world.<\/li><li><strong>Competitive fees.<\/strong> Low commissions on futures trading with Interactive Brokers range from $0.25 to $0.85 per contract.<\/li><li><strong>Advanced trading platforms.<\/strong> You can trade futures using advanced trading platforms like Trader Workstation and ComboTrader.<\/li><\/ul><\/div>\n\n\n            \n\n<ul class=\"luna-accordionGroup accordionGroup\">\n<li class=\"luna-accordion\" data-accordion=\"accordion\">\n<div class=\"luna-accordion__summary\">\n<p class=\"luna-accordion__heading\">  \n<button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"accordion976324966\" data-toggle=\"collapse\" data-target=\"#accordion976324966\">\n        <span class=\"luna-accordion__title\">Pros and cons<\/span>\n        <svg class=\"luna-icon\" aria-hidden=\"true\"><use xlink:href=\"#add\" data-accordion-icon=\"show\"><\/use><use xlink:href=\"#remove\"><\/use><\/svg><\/button>\n    <\/p>\n  <\/div>\n  <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"accordion976324966\" data-accordion=\"details\">\n    <div class=\"accordionContent\"><style> .pros-deco { margin: 0; } <\/style>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n  \r\n  \r\n\r\n\r\n\r\n  <div class=\"has-padding-xsmall\"><\/div>\r\n  <div class=\"u-grid u-grid--gutterCollapse pros-deco\">\r\n    <div class=\"u-grid__col u-1\/2@m\">\r\n      <b id=\"pros\">Pros<\/b>\r\n      <ul class=\"list-1 \">\r\n        \r\n          \r\n            \r\n              \r\n              <li>Access a huge range of markets and assets.<\/li>\r\n            \r\n          \r\n        \r\n          \r\n            \r\n              \r\n              <li>Platforms to suit beginners and experienced traders.<\/li>\r\n            \r\n          \r\n        \r\n          \r\n            \r\n              \r\n              <li>Over 100 order types.<\/li>\r\n            \r\n          \r\n        \r\n          \r\n            \r\n              \r\n              <li>Provides access to free futures trading educational resources.<\/li>\r\n            \r\n          \r\n        \r\n      <\/ul>\r\n    <\/div>\r\n\r\n    <div class=\"u-grid__col u-1\/2@m\">\r\n      <b id=\"cons\">Cons<\/b>\r\n      <ul class=\"list-12 \">\r\n        \r\n          \r\n            \r\n              \r\n              <li>Some advanced features may be overwhelming for beginners.<\/li>\r\n            \r\n          \r\n        \r\n          \r\n            \r\n              \r\n              <li>Watch out for withdrawal fees.<\/li>\r\n            \r\n          \r\n        \r\n      <\/ul>\r\n    <\/div>\r\n  <\/div><\/div>\n  <\/div>\n<\/li>\n \n<li class=\"luna-accordion\" data-accordion=\"accordion\">\n<div class=\"luna-accordion__summary\">\n    <p class=\"luna-accordion__heading\">\n      <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"accordion1141776391\" data-toggle=\"collapse\" data-target=\"#accordion1141776391\">\n        <span class=\"luna-accordion__title\">More details<\/span>\n        <svg class=\"luna-icon\" aria-hidden=\"true\"><use xlink:href=\"#add\" data-accordion-icon=\"show\"><\/use><use xlink:href=\"#remove\"><\/use><\/svg><\/button>\n    <\/p>\n  <\/div>\n  <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"accordion1141776391\" data-accordion=\"details\">\n    <div class=\"accordionContent\"><div data-category=\"\" data-niche=\"CAFST\" data-fieldset=\"bestpage\" class=\"CAFST bestpage \">\n        <table class=\"i_infobox product_infobox\">\n        <tbody><tr><th>Monthly Account Fee<\/th><td class=\"i_infobox_data product_infobox_data\">$0<\/td><\/tr><tr><th>Account Types<\/th><td class=\"i_infobox_data product_infobox_data\">RRSP,           TFSA,           Personal,           Joint,           Business,           FHSA,          Margin<\/td><\/tr><tr><th>Available Asset Types<\/th><td class=\"i_infobox_data product_infobox_data\">Stocks, Bonds, Options, Index Funds, ETFs, Forex, Currencies, Futures<\/td><\/tr><tr><th>ETF Transaction Cost<\/th><td class=\"i_infobox_data product_infobox_data\">Min. $1.00, Max. 0.5%<\/td><\/tr><tr><th>Option Fee<\/th><td class=\"i_infobox_data product_infobox_data\">$1.00\u2013$1.25 per contract (min. $1.50)<\/td><\/tr>\n        <\/tbody>\n        <\/table><\/div><\/div>\n  <\/div>\n<\/li>\n  \n<\/ul>\n\n\n\n<\/div>\n<\/div>\n<\/div>\n<div class=\"u-grid__col u-1\/4@m u-1\/3@s is-hidden is-visible@s\" style=\"background-color: #F2F8FD; padding: 1.25rem calc(1.25rem - 1px)\">\n<div data-category=\"\" data-niche=\"CAFST\" data-fieldset=\"default\" class=\"CAFST default bestpage_infobox\">\n<div data-category=\"\" data-niche=\"CAFST\" data-fieldset=\"bestpage_hotstats\" class=\"CAFST bestpage_hotstats \">\n        <table class=\"i_infobox product_infobox\">\n        <tbody><tr><th>Stock Trading Fee<\/th><td class=\"i_infobox_data product_infobox_data\">Max. 0.5%<\/td><\/tr><tr><th>Account Fee<\/th><td class=\"i_infobox_data product_infobox_data\">$0<\/td><\/tr><tr><th>FX Fee<\/th><td class=\"i_infobox_data product_infobox_data\">0.08\u20130.2 bps trade value, min $1.00\u2013$2.00 USD<\/td><\/tr><tr><th>Min. Deposit<\/th><td class=\"i_infobox_data product_infobox_data\">$0<\/td><\/tr>\n        <\/tbody>\n        <\/table><\/div>\n<\/div>\n<center>\n\n<style>\r\n.table--success { width: max-content !important; }\r\n<\/style>\r\n\r\n\r\n<div aria-hidden=\"false\" class=\"rewards--element-container rewards--container sticky-cta \" data-product-id=\"975d70ce-a17f-4df3-a20b-5979922c8032\" data-product-name=\"Interactive Brokers\" data-niche=\"Share Trading\" data-provider-name=\"Interactive Brokers\" data-rewards-campaign-name=\"\">\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n  \r\n\r\n\r\n\r\n\r\n\r\n      \r\n \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n  \r\n\r\n\r\n\r\n  \r\n \r\n\r\n\r\n\r\n \r\n\r\n  <\/div>\r\n<style>\r\n.hidden-temp {  overflow: visible; }\r\n.back-cover { display:none; width: 100vw; height: 100vh; background-color:rgba(0,0,0,.5); position: fixed !important; z-index: 10; top:0; left: 0; }  \r\n.card-t { position: fixed !important; z-index: 11; text-align: justify; display: flex; justify-content: center; width: 100%; top: 50%; left: 50%;  transform: translate(-50%, -50%); }\r\n.terms-c { color: #0271e1; z-index:3; } \r\n.terms-c:hover { color: #1591fe; cursor: pointer;}\r\n.terms-card-r { border-radius: 14px; }\r\n\r\n\r\n  \r\n@media (max-width:481px)  { \r\n\/* .card-t { position: fixed; width: 80%; text-align: justify;  top: 30vw; left: 5vh; }\r\n .card-t { position: fixed; z-index: 11; text-align: justify;  }*\/\r\n }\r\n<\/style>\r\n  \r\n\r\n  \r\n<script>\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n    document.addEventListener(\"click\", function(event) {\r\n        const sendDataButton = document.getElementById(\"sendDataButton\");\r\n\r\n        \/\/ Check if the click was on the sendDataButton\r\n        if (event.target && event.target.id === \"sendDataButton\") {\r\n            event.preventDefault(); \/\/ Prevent default link behavior\r\n\r\n            \/\/ Ensure the button exists\r\n            if (sendDataButton) {\r\n                \/\/ Use dataset to get the data attributes\r\n                const nicheData = sendDataButton.dataset.nicheData || ''; \/\/ Fallback to empty string\r\n                const productData = sendDataButton.dataset.productData || ''; \/\/ Fallback to empty string\r\n                const fiUri = sendDataButton.dataset.fiUri || ''; \/\/ Access fiUri in camelCase\r\n                const psUri = sendDataButton.dataset.psUri || ''; \/\/ Access psUri in camelCase\r\n                const psGn = sendDataButton.dataset.psGn || ''; \/\/ Access psGn in camelCase\r\n                const tc = sendDataButton.dataset.tc || ''; \/\/ Access data-tc attribute\r\n\r\n                \/\/ Extract the category from the current URL\r\n                const currentUrl = window.location.href;\r\n                const urlParts = currentUrl.split('\/');\r\n                const category = urlParts.length > 4 ? urlParts[3] : ''; \/\/ Get the category from the URL\r\n\r\n                \/\/ Construct the new URL with query parameters, encoding each value\r\n                const newUrl = `https:\/\/www.finder.com\/about-us\/product-lander-test?niche_data=${encodeURIComponent(nicheData)}&product_data=${encodeURIComponent(productData)}&fi_uri=${encodeURIComponent(fiUri)}&ps_uri=${encodeURIComponent(psUri)}&ps_gn=${encodeURIComponent(psGn)}&category=${encodeURIComponent(category)}&tc=${encodeURIComponent(tc)}`;\r\n                \r\n                \/\/ Perform the redirect with the updated URL\r\n                window.location.href = newUrl;\r\n            }\r\n        }\r\n    });\r\n});\r\n<\/script>\r\n\r\n  \r\n\n\n \n\n<\/center>\n\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n\n<\/div><article class=\"luna-card luna-card--primary luna-card--border\">\n  <div class=\"luna-card__block\" style=\"padding:0.7em\">\n<span style=\"font-size:0.9em; font-weight: 800; font-style: italic; text-transform: uppercase;\">Related: <\/span><a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/best-stock-trading-apps-in-canada\" style=\"text-decoration:underline; font-size:0.9em;\">Best stock trading apps in Canada<\/a>\n<\/div>\n<\/article><h3>What are futures markets?<\/h3><p>You can trade futures on a wide range of underlying assets, such as:<\/p><ul><li>Stock indices (like the Dow Jones and the S&amp;P 500)<\/li><li>Metals (like gold and silver)<\/li><li>Energy (like crude oil and natural gas)<\/li><li>Agricultural commodities (like corn and soybean)<\/li><li>Currencies (like the Canadian dollar or the euro)<\/li><li>Interest rates (like US 30-year bond futures)<\/li><li>Cryptocurrencies (like Bitcoin and Ethereum)<\/li><\/ul><p>Futures are traded on regulated exchanges. Some of the largest futures exchanges in the world include the Chicago Mercantile Exchange (CME), the New York Mercantile Exchange (NYME), the Chicago Board of Trade (CBOT), the National Stock Exchange of India (NSE), Eurex and the Shanghai Futures Exchange (SHFE).<\/p><h3><img decoding=\"async\" class=\" wp-image-1041657 alignright\" title=\"Image: Finder\" src=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2018\/05\/security-gaurd-check-icon_Finder_500x500.png\" alt=\"security check mark icon\" width=\"130\" height=\"130\" srcset=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2018\/05\/security-gaurd-check-icon_Finder_500x500.png?fit=180 180w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2018\/05\/security-gaurd-check-icon_Finder_500x500.png?fit=360 360w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2018\/05\/security-gaurd-check-icon_Finder_500x500.png?fit=390 390w\" sizes=\"(max-width: 390px) 100vw, 390px\" loading=\"lazy\">What are futures contracts?<\/h3><p>Futures contracts are an integral part of trading futures. A futures contract is a legal agreement between a buyer and seller to buy an underlying asset at a particular price on a specified date in the future.<\/p><p>The asset could be a commodity such as crude oil or wheat, a currency such as CAD or Bitcoin, an interest rate, or an index like the S&amp;P\/TSX 60.<\/p><p>Futures contracts are standardized and therefore highly transferable. For example, a standard gold futures contract represents 100 troy ounces of gold, while a standard wheat futures contract represents 5,000 bushels of wheat.<\/p><p>Futures contracts were first developed in the USA in the 19th century as a way for farmers to lock in prices for crops to be planted and harvested in the future.<\/p><p>Contracts set out the quantity of the asset being bought and sold, when it is to be delivered, how the contract will be settled, the price quote, and the minimum increment that the price of the contract can move.<\/p><h3>How to trade futures in Canada<\/h3><p>There are a few basic specifications you need to be aware of when opening a futures contract:<\/p><ul><li><strong>Underlying asset.<\/strong> This is the commodity or financial instrument that you agree to buy or sell on a future date, such as crude oil or gold.<\/li><li><strong>Contract size.<\/strong> This is the quantity of the underlying asset included in the futures contract. The amount is standardized but varies depending on the asset in question. So while a standard crude oil contract represents 1,000 barrels, a standard corn contract represents 5,000 bushels.<\/li><li><strong>Contract value.<\/strong> This is calculated by multiplying the contract size by the current price of the underlying asset. So if corn is trading at $400 a bushel, the value of the contract is $2 million (5,000 x $400).<\/li><li><strong>Tick size.<\/strong> This is the smallest unit of price fluctuation for the contract.<\/li><li><strong>Expiration date.<\/strong> Every futures contract comes with an expiration date, which is the last day it can be traded. However, most contracts are liquidated before reaching expiration.<\/li><li><strong>Settlement method.<\/strong> When futures contracts reach their expiration date, they can either be settled in cash or with physical delivery of the underlying asset. But it\u2019s worth noting that many brokers don\u2019t allow physical delivery \u2014 for example, with the exception of some currency futures, Interactive Brokers does not allow its customers to make or receive delivery of the underlying commodity. Instead, you\u2019ll need to roll forward or close out your position.<\/li><\/ul><h4>Leverage and margin<\/h4><p>The other factor you need to be aware of when trading futures is that futures contracts use leverage. This means you don\u2019t need to deposit the full contract value into your trading account when entering into a futures contract.<\/p><p>Instead, you\u2019ll need to meet the initial margin requirement. This is a small percentage of the total contract value, typically 3% \u2013 12%.<\/p><p>This means you only need to deposit a small amount of funds to open a large-value contract position. So if the market moves in your favour, you could achieve sizable gains compared to the small amount you invested \u2014 but conversely, any losses you suffer will also be amplified.<\/p><p>You\u2019ll also need to be aware of the maintenance margin. Once you\u2019ve opened a position, the maintenance margin is the minimum account balance you need to maintain in order to keep your position open.<\/p><h3>What are futures CFDs?<\/h3><p>CFD stands for contract for difference. A futures CFD lets you speculate on whether the price of a futures contract will rise or fall.<\/p><p>Like futures contracts, CFDs are leveraged, amplifying any gains (but also any losses). But unlike futures contracts, there\u2019s no need to take on any obligation to buy the underlying asset on a set date and at a predetermined price in the future.<\/p><p>With CFDs, you don\u2019t actually buy or sell the underlying asset; instead, you instead speculate on which direction the price of that asset will head. So futures CFDs provide access to futures markets without taking on the same obligations as futures contracts. However, they with their own risks and potential drawbacks too.<\/p><article class=\"luna-card luna-card--primary luna-card--border\">\n  <div class=\"luna-card__block\" style=\"padding:0.7em\">\n<span style=\"font-size:0.9em; font-weight: 800; font-style: italic; text-transform: uppercase;\">Must read: <\/span><a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/cfd-trading\" style=\"text-decoration:underline; font-size:0.9em;\">CFD trading<\/a>\n<\/div>\n<\/article><h3><img decoding=\"async\" class=\" wp-image-1041648 alignright\" title=\"Image: Finder\" src=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2018\/05\/helping-hand-icon_Finder_500x500.png\" alt=\"helping hand icon\" width=\"130\" height=\"130\" srcset=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2018\/05\/helping-hand-icon_Finder_500x500.png?fit=180 180w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2018\/05\/helping-hand-icon_Finder_500x500.png?fit=360 360w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2018\/05\/helping-hand-icon_Finder_500x500.png?fit=390 390w\" sizes=\"(max-width: 390px) 100vw, 390px\" loading=\"lazy\">How much does futures trading cost?<\/h3><p>Brokers charge a commission when you trade futures contracts. For example, Interactive Brokers charges commissions of $0.25 to $0.85 per contract.<\/p><p>However, commissions may vary depending on the number of contracts you trade per month, with cheaper fees for frequent traders. The fee may also vary depending on whether you choose a standard futures contract or a micro contract. The exchanges where futures contracts are traded can charge fees too, while clearing and regulatory fees may apply.<\/p><p>Some brokers may also charge account fees or fees to access specific tools or services. For example, you may pay a monthly subscription fee to access real-time market data.<\/p><p>The other factor you need to consider is the margin requirement. This is set by your broker and outlines the amount of funds you need to open a futures position. For example, on a $30,000 contract with a 5% margin requirement, you would need to deposit $1,500.<\/p><h3>How to choose the best futures trading broker<\/h3><p>Consider the following factors when searching for the best futures trading platform in Canada for you.<\/p><h4>Fees and commissions<\/h4><p>Check what commissions the broker charges on futures trading. It\u2019s also a good idea to check whether you\u2019ll need to pay an ongoing subscription fee to access real-time market data.<\/p><h4>Supported markets<\/h4><p>Check how many global exchanges and markets you can access through your trading account. Can you trade futures on commodities, indices, interest rates, bonds, currencies and cryptocurrencies?<\/p><h4>Research tools<\/h4><p>Look for a platform that provides access to a wide range of market research tools and news services to help you stay up to date with the latest developments.<\/p><h4>Ease of use<\/h4><p>If the broker offers a paper trading account, trial its trading platform to ensure that it\u2019s easy and intuitive to use. Watching how-to videos and reading reviews from other users will also help you work out whether the platform is a good fit for your trading needs.<\/p><h4>Educational resources<\/h4><p>If you want to increase your knowledge of futures trading and global financial markets, some brokers provide access to a variety of free educational resources and courses.<\/p><h4>Customer support<\/h4><p>Find out when the broker\u2019s customer support team is available and how you can contact them. Look for live chat, phone and email support.<\/p><h4>Regulation<\/h4><p>Make sure the broker you choose is regulated by the Canadian Investment Regulatory Organization (CIRO). Check that they are also a member of the Canadian Investor Protection Fund (CIPF).<\/p><h3>Hedgers vs speculators in futures trading<\/h3><p>There are two ways to use futures as a trader: hedging and speculating.<\/p><p>Hedgers use futures contracts to manage their risk, providing a form of insurance when the market moves against them. The aim is to counteract any losses they may suffer due to their exposure to an underlying asset.<\/p><p>For example, a bank that provides mortgages to home buyers can use futures contracts to hedge against interest rate changes that could impact its profits. Alternatively, if you\u2019re invested in S&amp;P 500 ETFs with the expectation that the S&amp;P 500 will rise, you can protect yourself against market volatility by going short on an S&amp;P 500 futures contract.<\/p><p>Meanwhile, speculators trade futures with the aim of making a profit from price changes. When they think the price of an underlying asset will move in a specific direction, they trade accordingly. Speculators go long when they think the underlying market or asset will increase, and they go short if they think it will fall.<\/p><h3>What are the potential benefits of futures trading?<\/h3><ul class=\"list-1\"><li><strong>Trade almost 24 hours a day.<\/strong> Futures markets are open close to 24 hours a day, 6 days a week, allowing you to trade outside of normal market hours and take advantage of global developments as they occur.<\/li><li><strong>Leverage.<\/strong> You can trade futures contracts on leverage, which means you only need a small investment to control a large position. This provides the potential for increased returns.<\/li><li><strong>Diversification.<\/strong> Unlike <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/best-canadian-stocks\">investing in stocks<\/a>, when buying shares means investing in a single company, trading futures allows you to gain exposure to entire asset classes.<\/li><li><strong>Low commissions.<\/strong> Fees for trading futures are generally quite low, so you don\u2019t need to worry about broker commissions taking a big chunk of your profits.<\/li><li><strong>High liquidity.<\/strong> Futures markets have deep liquidity, which means orders can be executed quickly.<\/li><\/ul><h3>What are the potential risks of futures trading?<\/h3><ul class=\"list-13\"><li><strong>Not suitable for beginners.<\/strong> Futures trading is complicated and best suited to experienced traders who can put effective risk management strategies in place.<\/li><li><strong>Market volatility.<\/strong> Futures prices can be volatile and are affected by a wide range of economic and political factors, so the market could potentially move against you quickly.<\/li><li><strong>Leverage.<\/strong> While trading on leverage can amplify gains, any losses you incur are also amplified.<\/li><li><strong>Margin calls.<\/strong> If the balance of your futures trading account drops below the broker\u2019s margin requirements, you\u2019ll need to deposit additional funds.<\/li><\/ul><h3>How to sign up for a futures trading account in Canada<\/h3><p>Want to sign up for an account and start trading futures? Here\u2019s what you need to do.<\/p><ol><li><strong>Choose a trading platform.<\/strong> Compare brokerages to find the best futures trading platform for your needs. Look for low commissions, access to a wide range of markets and a user-friendly trading platform.<\/li><li><strong>Complete an online application.<\/strong> Sign up for a trading account by providing your personal information and contact details. You\u2019ll also need to provide details of your trading experience and information about the source of your funds.<\/li><li><strong>Prove your identity.<\/strong> You\u2019ll need to provide a government-issued photo ID to verify your identity.<\/li><li><strong>Fund your account.<\/strong> Once your application has been approved and your account activated, you\u2019ll need to deposit funds via bank transfer, e-Transfer, wire transfer or bill payment.<\/li><li><strong>Start trading.<\/strong> When your money arrives, it\u2019s time to place your first trade.<\/li><\/ol><article class=\"luna-card luna-card--primary luna-card--border\">\n  <div class=\"luna-card__block\" style=\"padding:0.7em\">\n<span style=\"font-size:0.9em; font-weight: 800; font-style: italic; text-transform: uppercase;\">Dive deeper: <\/span><a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/best-brokerage-signup-bonuses\" style=\"text-decoration:underline; font-size:0.9em;\">Best brokerage signup bonuses<\/a>\n<\/div>\n<\/article><h3>Bottom line<\/h3><p>Futures trading has several benefits, providing an effective hedging tool to protect yourself against market volatility as well as the potential for profits for speculators. But futures are complicated and come with plenty of risks attached, so they\u2019re best suited to experienced investors. Make sure you understand exactly what you\u2019re getting into and all the risks involved before placing your first trade.<\/p><h3>Frequently asked questions about futures trading in Canada<\/h3><ul class=\"luna-accordionGroup accordionGroup\">\n\t<li class=\"luna-accordion\" data-accordion=\"accordion\">\n    <div class=\"luna-accordion__summary\">\n        <h4 class=\"luna-accordion__heading\">\n            <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"faq-builder-0000000000\" data-toggle=\"collapse\" data-target=\"#faq-builder-0000000000\">\n                <span class=\"luna-accordion__title\">Do I need $25,000 to trade futures?<\/span>\n                <svg class=\"luna-icon\" aria-hidden=\"true\">\n                    <use xlink:href=\"#chevron-down\" data-accordion-icon=\"show\"><\/use>\n                    <use xlink:href=\"#chevron-up\" data-accordion-icon=\"hide\" class=\"is-hidden\"><\/use>\n                <\/svg>\n            <\/button>\n        <\/h4>\n    <\/div>\n    <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"faq-builder-0000000000\" data-accordion=\"details\">\n        <div class=\"accordionContent\">\n            <div>\n                <p>No, you don't need $25,000 or more to start trading futures. This misconception most likely exists due to FINRA's Pattern Day Trader rule for trading stocks in the USA, which requires day traders to maintain minimum equity of $25,000 in their margin account. Check your broker's margin requirements to find out what initial investment you'll need to start trading.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/li>\n<li class=\"luna-accordion\" data-accordion=\"accordion\">\n    <div class=\"luna-accordion__summary\">\n        <h4 class=\"luna-accordion__heading\">\n            <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"faq-builder-0000000001\" data-toggle=\"collapse\" data-target=\"#faq-builder-0000000001\">\n                <span class=\"luna-accordion__title\">What is the difference between futures and options?<\/span>\n                <svg class=\"luna-icon\" aria-hidden=\"true\">\n                    <use xlink:href=\"#chevron-down\" data-accordion-icon=\"show\"><\/use>\n                    <use xlink:href=\"#chevron-up\" data-accordion-icon=\"hide\" class=\"is-hidden\"><\/use>\n                <\/svg>\n            <\/button>\n        <\/h4>\n    <\/div>\n    <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"faq-builder-0000000001\" data-accordion=\"details\">\n        <div class=\"accordionContent\">\n            <div>\n                <p>Futures and options are both leveraged derivative contracts. The difference between them is that with a futures contract, the two parties are obligated to buy or sell the underlying asset at or before a future date at a predetermined price. But with options, there's no obligation to buy or sell the asset at the specific price and date\u2014you can instead choose to pay the premium and not follow through with the transaction.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/li>\n<li class=\"luna-accordion\" data-accordion=\"accordion\">\n    <div class=\"luna-accordion__summary\">\n        <h4 class=\"luna-accordion__heading\">\n            <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"faq-builder-0000000002\" data-toggle=\"collapse\" data-target=\"#faq-builder-0000000002\">\n                <span class=\"luna-accordion__title\">Can I use a paper trading account to practise trading futures?<\/span>\n                <svg class=\"luna-icon\" aria-hidden=\"true\">\n                    <use xlink:href=\"#chevron-down\" data-accordion-icon=\"show\"><\/use>\n                    <use xlink:href=\"#chevron-up\" data-accordion-icon=\"hide\" class=\"is-hidden\"><\/use>\n                <\/svg>\n            <\/button>\n        <\/h4>\n    <\/div>\n    <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"faq-builder-0000000002\" data-accordion=\"details\">\n        <div class=\"accordionContent\">\n            <div>\n                <p>Yes, you can use a paper or demo trading account to understand how futures markets work and test out trading strategies. Find out more about how demo accounts work in our paper trading guide.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/li>\n\n<\/ul>\n<div id=\"sources\" style=\"position: relative;\"><h3 style=\"position: absolute; width: 1px; height: 1px; padding: 0; margin: -1px; overflow: hidden; clip: rect(0,0,0,0); white-space: nowrap; border: 0;\">Sources<\/h3>\n<div id=\"lazy0000000003\"><\/div>\n<script type=\"application\/json\" id=\"lazyloaded-assets-json-lazy0000000003\" class=\"lazyloaded-assets-json\">{\"critical-scripts\":[],\"scripts\":[\"https:\\\/\\\/www.finder.com\\\/parent-theme\\\/shortcodes\\\/article-source\\\/prod\\\/article-source.de087a0da9824e407767.js\"],\"styles\":[\"https:\\\/\\\/www.finder.com\\\/parent-theme\\\/shortcodes\\\/article-source\\\/prod\\\/article-source.87684078d471e76125dd.css\"]}<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>Learn the pros and cons of futures trading, how it works and how to start trading.<\/p>\n","protected":false},"author":516,"featured_media":1062331,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"apple_news_api_created_at":"","apple_news_api_id":"","apple_news_api_modified_at":"","apple_news_api_revision":"","apple_news_api_share_url":"","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":"","apple_news_is_paid":"","apple_news_is_preview":"","apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"footnotes":""},"categories":[38411],"tags":[],"asset_tag":[],"class_list":["post-924509","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-trading"],"apple_news_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.9 (Yoast SEO v24.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is Futures Trading and How Does it Work? | Finder Canada<\/title>\n<meta name=\"description\" content=\"A beginner\u2019s guide to futures trading in Canada. Learn how futures work, how to start trading, and how to find the best trading platform.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.finder.com\/ca\/stock-trading\/futures\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A guide to futures trading in Canada\" \/>\n<meta property=\"og:description\" content=\"A beginner\u2019s guide to futures trading in Canada. 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