TD Ameritrade

Trading futures isn't for everyone.
Good thing you're not everyone.

A futures contract sounds like what it is—a standardized contract for the purchase and sale of financial instruments or physical commodities for a future delivery on a regulated commodity futures exchange.

While the futures market offers the potential for great rewards, there is also the chance for greater loss. By understanding the benefits and risks, and managing both sides, you’ll be able to make informed decisions when implementing your trading plan.

Extended-hours trading

Gain the flexibility to respond when needed to market conditions and economic events. Futures trading is available almost 24 hours a day, six days a week.

Diversification

Access a wide variety of investments, including more than 50 futures products in indices, metals, energy, grains, currencies, and more. Plus, consider expanding your trading approach by leveraging option strategies in futures markets. The more diversified you are, the more prepared you may be for bullish, bearish, and sideways markets.

Leverage

Control a large investment with a relatively small amount of money. Sounds good, right? But, futures are volatile, and due to low margins and high leverage, a small up or down movement could result in a significant gain or loss as compared to your initial margin investment. So keep in mind, although leverage allows for strong potential returns, it can also result in significant losses.

Potential tax benefits

Enjoy preferred tax rates on futures trades based on the 60/40 rule. That means 60% of net gains on futures trading is treated like long-term capital gains. The other 40% of net gains is treated as short-term capital gains, so taxed as ordinary income. To learn more, speak with your tax consultant or visit the IRS website for more information.

Get support—any time you need it

Have questions along the way? We've got answers. Contact one of our futures specialists 24/7 for help.

866-839-1100

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Live chat

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