Trading Futures vs. Stocks

Why Do So Many Traders Prefer Futures?

If you’re trying to figure out where to begin your trading journey, there’s no better place to start than futures, which offer unique advantages over other financial instruments. Although futures trading requires education and practice, it can offer many more trading opportunities than other trading markets.

Here we’ll discuss the many key advantages of trading futures vs. stocks, including 24-hour trading, unrestricted shorting, and trading on a level playing field.

Reasons stock traders add futures to their trading portfolios

No issues with shorting

One of the biggest challenges stock traders face every day is the inability to short stocks and ETFs easily and consistently. This is often caused by a shortage of available long positions at a supporting brokerage, which are needed to borrow those shares for a trader to enter a short position. With futures trading, entering a short position is seamless. Every future can be shorted for any number of contracts at any time.

24-Hour trading

If you want to trade where the action is, then look no further than futures trading in a global marketplace. Unlike stocks and ETFs, with limited trading hours and often limited trading volume, the primary futures markets are often highly liquid and tradable nearly 24 hours. This provides market opportunity around the clock, allowing you to react to overnight news and trade on your own schedule.

Diversification

Futures provide exposure and simplified access to a wide variety of financial markets and commodities that may otherwise be difficult to trade through individual stocks. In addition to major market indices like the E-mini S&P, Nasdaq, and Dow Jones, you can trade markets that affect our everyday lives like crude oil, gold and silver, bonds, coffee, and many others. Overall, futures contracts offer greater diversification than other types of highly correlated investments and allow you to take advantage of more trading opportunities.

What does it cost to get started?

It's easy to get started trading futures with a NinjaTrader account.

Futures trading generally has a lower initial account opening capital requirement than stock trading.
There is no minimum funding requirement to get started with NinjaTrader. You can open your account with as little as a few hundred dollars and start trading.

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