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Both aspiring and seasoned traders are question-generating machines; they’re constantly questioning their system, their interpretation of events and their behavior in an attempt to improve and optimize.
One of the key questions in a trader’s journey is what instruments he or she will be trading. Given the many available choices, this isn’t always an easy question to answer. Despite the complexity, deciding whether shares, options contracts, futures contracts, or a combination of two or more, will be your trading instrument of choice is important.
Tradovate LLC, a modern futures trading platform and broker, is attempting to simplify the selection process. Its platform, rated 4.4 on TrustPilot, is meant to provide traders with robust tools tailor-made for futures contracts.
While consideration of the actual instrument is essential in the selection process, having a broker and platform that’s tailored for your style of trading can also help.
So what arguments exist for trading futures contracts?
Like the cryptocurrency scene, futures trading operates on a 24-hour market cycle. This gives traders the ability to take action at any time.
Unlike stock and options trading, futures trading is not subject to the notorious pattern day trading rule (PDR) that limits a trader’s number of trades per day when their account value is less than $25,000. As a futures trader, all you need is enough cash to cover a futures contract to engage with the markets.
The accessibility of the futures market comes with potential financial benefits. With futures trading, for example, traders can buy approximately $100,000 worth of the S&P 500 stocks for less than $5,000 margin. With mini- and micro-sized contracts, traders can leverage even more money in their trades. Note, however, that traders assume more risk with these actions and should understand and accept this risk before moving forward.
An additional financial advantage can be found in taxes and wash sale rules. Future profits are taxed 60% as long-term capital gains instead of as income, making the tax burden a little less heavy on traders. Finally, with futures, there are no wash sale rules, which means you can use losses to offset gains from futures trading activities.
Unlike larger operators like Interactive Brokers Group Inc. (NASDAQ: IBKR) and Toronto-Dominion Bank’s (NYSE: TD) Ameritrade, Tradovate’s sole focus is on futures. As such, there are a number of tailor-made functions that may provide benefits for futures traders.
To facilitate the newcomer’s journey, Tradovate states it ensures you can backtest your strategy through a risk-free simulated trading environment, open an online account without a funding minimum and receive 24/5 dedicated support.
For both newcomers and seasoned traders, Tradovate offers affordable future contracts pricing, including a 25-cent micro contract and a 79-cent standard contract with low margins. Tradovate’s platform is both PC & Mac compatible with desktop, web and mobile apps available, granting traders real-time updates on whichever browser or device is desired. The platform also gives you access to historical session data at four times the speed with a Netflix style on-demand Market Replay add-on function.
Interested in giving Tradovate a shot? Click here.
This post contains content that was originally written and distributed by Benzinga and sponsored by Tradovate. This content is for informational purposes only and is not intended to be investing advice.