Introduction to Futures Trading
Firstly, what are futures?
Futures trading is a type of trading which involves speculation relating to the price of a commodity moving up on down in a market.
The futures markets are considered to be the most common form of day trading. Trades made on futures markets can take place at low commissions and unlike the stock market, trading does not need to take place during the day.
In Australia, there are a number of futures exchanges – these are listed below:
Futures Markets in Australia
| Contract Code | Contract |
| AP | SFE SPI 200™ Index Futures and Options |
| BB | NZ 90 Day Bank Bill Futures and Options |
| BW | Broad Wool Futures |
| CT | MLA/SFE Cattle Futures |
| FW | Fine Wool Futures |
| GW | Greasy Wool Futures and Options |
| IB | 30 Day Interbank Cash Rate Futures |
| IR | 90 Day Bank Bill Futures and Options |
| TN | NZ 10 Year Government Stock Futures and Options |
| TY | NZ 3 Year Government Stock Futures and Options |
| UA | Australia/US 10 year Bond Spread Futures |
| XT | 10 Year Commonwealth Treasury Bond Futures and Options |
| XD | Intra-Day Options on 10 Year Commonwealth Treasury Bond Futures |
| XO | Overnight Options on 10 Year Commonwealth Treasury Bond Futures |
| XS | 10 Year Interest Rate Swap Futures |
| YT | 3 Year Commonwealth Treasury Bond Futures and Options |
| YD | Intra-Day Options on 3 Year Commonwealth Treasury Bond Futures |
| YO | Overnight Options on 3 Year Commonwealth Treasury Bond Futures |
| YS | 3 Year Interest Rate Swap Futures |
| ZO | NZ 30 Day Official Cash Rate Futures |
Full service futures brokers vs. non-advisory futures brokers
As with stock brokers, Futures brokers are brokers that assist with the trading of futures.
Futures brokers exist under two categories, full service Futures brokers and non-advisory Futures brokers. The main difference is that full service brokers provide assistance relating to different types of trades, whereas advisory brokers do not
Full Service Brokers
Full service brokers operate in a similar manner to financial planners in that in addition to offering advice on buying and selling shares, they can design a custom trading plan based on your needs. As a result of this tailored plan, a full service broker will charge a higher brokerage fee than a non-advisory broker.
Non-advisory Brokers
Non-advisory brokers do not provide any advice on your decisions to purchase particular shares. For this reason, brokerage costs are significantly lower and these brokers will be more suitable to traders that are confident in their trading techniques. These brokers are either telephone or more commonly, Internet based.
Futures Brokers in Australia
Interactive Brokers
Interactive Brokers have access to futures on over 80 market destinations worldwide, with $4.4 billion in equity capital.
MF Global
MF Global
At MF Global, you can trade both global futures and forex futures. In addition to offering access to Australian futures, MF Global offer access to 25 of the world’s leading futures exchanges and – more than 300 futures products in all.
Mirus Futures
Mirus Futures is a provider of commodity trading brokerage services providing trading solutions for:
* Managed Futures
* Automated Trading System
* Self – Directed Trading
Morrison Securities
Morrison Securities is a broker Participant of the Australian Stock Exchange (ASX) and the Sydney Futures Exchange (SFE), providing commissions from $5.00 per Contract
