Stocks and Commodities Magazine

How to choose a Futures and Options platform

What criteria should I use for choosing a trading platform?

It is in the best interest of brokerage firms to make it as easy as possible for their clients to trade. After all, they generate revenue on each transaction and the more convenient it is to enter an order the more commission they will potentially earn. Accordingly, brokerage firms have worked hard to provide each type of trader an attractive trading solution.

Unfortunately, finding the appropriate platform for your circumstances can be a cumbersome task. Platforms come in all sizes, costs, and specialties but not all brokerage firms offer all platforms. Further, even platforms that were developed by third party vendors such as QST, NinjaTrader, Cunningham’s T-4, TradeNavigator or R-Trader, likely have different data providers and will certainly have differing margin rules across various brokerage firms. This is because the broker and exchanges set margin policy, not the platform. As a result, traders should consider their choice of brokerage house and platform within the same process.

There are several futures trading platforms offered to clients that are free to use. In fact, most brokerage firms will offer at least one no cost order entry solution. In the past, free platforms were challenged in features but in today’s environment there are some highly capable complimentary offerings. Many of them include real-time and streaming quotes on options and futures, and perhaps even a nice charting package. For the casual position trader, these often meet their needs and make premium (and potentially costly) platforms unnecessary. Nonetheless, day traders or swing traders who need a more robust application, might find it worthwhile to pay a little more for increased functionality. In the end, the goal is to make money, not to save it. If having premium charts and order entry will help your strategy excel then it is money well spent.

 

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