Best Futures Trading Platforms in Canada

Futures contracts are legal agreements to buy or sell an asset at a predetermined price on a specified future date. They are standardized and traded on exchanges, covering various underlying assets, including commodities (e.g., oil, gold), financial instruments (e.g., interest rates, stock indexes), and currencies. Futures allow parties to hedge against price fluctuations or speculate on future price movements. The key feature of a futures contract is that both the buyer and seller are obligated to fulfill the contract on the settlement date, regardless of market prices at that time.

Most people invest in mutual funds, ETFs, or stocks. They might use options to manage their investment risk or to amplify their returns through leverage. Futures contracts are financial derivatives similar to options. Like options, they might be used for hedging or to use leverage and amplify returns. Not all trading platforms offer futures trading. Thus, for those who are interested in futures trading, it is important to research trading platforms that offer this product.

REDEFINE YOUR

STOCK TRADING

Trusted By Over 21 Million Users Worldwide

$0 account fee and trade US stocks for up to 90% less

Get access to pre and post-market trading opportunities

Free real time stock quotes and free access to level 2 market data

Advanced charting and research tools

LEARN MORE

REDEFINE YOUR STOCK TRADING

Trusted By Over 21 Million Users Worldwide

$0 account fee and trade US stocks for up to 90% less

Get access to pre and post-market trading opportunities

Free real time stock quotes and free access to level 2 market data

Advanced charting and research tools

LEARN MORE

Big banks like RBC, TD, BMO, Scotia and CIBC do have access to futures markets, but because futures contracts are a niche product which can entail a very high level of risk, they do not market futures trading to retail investors. Depending on their experience and financial situation, their customers can ask for and may get futures trading opportunities. However, such opportunities are not mentioned on the website for their retail online trading platforms. As a result, unlike the long lists of trading platforms in Canada, options trading platforms, and day trading platforms, the list of futures trading platforms is very short.

Interactive Brokers (IBKR) is a popular global brokerage platform known for offering a wide range of investment products and services, including futures trading. For Canadians, interactive brokers provide access to various future markets, and they are considered one of the best platforms for futures trading due to their low fees, advanced trading tools, and comprehensive market access. Here’s what Canadians should know about Interactive Brokers, particularly for futures trading:

Summary for Canadians:

• Pros: IBKR is an excellent platform for Canadians looking to trade futures due to its low fees, global market access, advanced tools, and risk management features.
• Cons: Futures trading involves significant risks due to leverage, and the platform's complexity might be overwhelming for beginners. Additionally, Canadians will need to navigate currency conversion if trading contracts priced in non-CAD currencies.

Key Features of Interactive Brokers for Futures Trading:

• 1. Access to Global Futures Markets: IBKR allows Canadians to trade futures contracts on major exchanges around the world, including CME (Chicago Mercantile Exchange), ICE (Intercontinental Exchange), Eurex and the Montreal Exchange (MX). This includes commodity futures (oil, gold), indices (S&P 500, NASDAQ), interest rates, currencies, etc.
• 2. Low Commissions and Fees: One of the major draws of IBKR is its competitive commission structure. Futures trading fees on Interactive Brokers are relatively low compared to many other brokers. The exact cost will depend on the exchange and contract, but IBKR’s pricing model is very transparent, and costs can be as low as USD 0.85 per contract for futures trading, plus exchange and regulatory fees.
• 3. Margin and Leverage: IBKR provides flexible margin requirements for futures contracts. Margin requirements depend on the contract and the volatility of the underlying asset. The platform offers significant leverage, allowing you to control larger positions with less capital, but it's important for traders to manage risks properly, as leverage amplifies both potential gains and losses. IBKR liquidate your position if the market moves against you and your margin becomes insufficient.
• 4. Advanced Trading Tools: Interactive Brokers is known for its robust suite of trading tools, including:
• 5. Data and Research Tools: IBKR offers a wide range of market data, research, and news from various sources, which can be crucial for futures traders. You can access real-time data on futures markets, as well as tools like depth of market (DOM) to view liquidity and order flow.
• Trader Workstation (TWS): An advanced trading platform with customizable features, real-time market data, and sophisticated charting tools.
• Risk Navigator: A tool to help manage and visualize risk in real-time across portfolios, including futures positions.
• IBKR Mobile App: Allows for futures trading on-the-go, ensuring access to markets even when you’re away from your computer.
• IBKR APIs: For those looking for automated trading strategies, Interactive Brokers offers APIs that allow for programmatic trading.
• 6. Risk Management: Futures trading can be high risk due to the potential for leveraged losses, but IBKR provides multiple tools to help Canadian traders manage these risks:
• Stop orders and stop-limit orders: Essential tools for managing downside risk.
• Risk Navigator: Tracks real-time portfolio risk across multiple asset classes, including futures.
• 7. Currency Options:Since futures trading can involve multiple global exchanges, Interactive Brokers allows Canadian traders to hold and trade in multiple currencies, which can be useful when dealing with futures contracts priced in USD or other foreign currencies. IBKR offers competitive forex rates when converting CAD to other currencies.
• 8. Educational Resources: For those who are new to futures trading or need to improve their skills, IBKR offers a large library of educational resources, including webinars, tutorials, and articles specifically tailored to trading futures.

Lightspeed Trading, now a part of Wedbush Securities, is a brokerage that specializes in providing services for active traders, particularly those involved in high-frequency and professional trading. It offers a powerful suite of trading platforms designed for traders who need advanced tools, fast executions, and direct market access (DMA). For Canadians, Lightspeed/Wedbush Trading provides access to a variety of markets, including equities, options, and futures.

Is Lightspeed Right for Canadian Traders?

Key Features of Lightspeed Trading (Wedbush Trading) in Canada:

• 1. Advanced Trading Platforms: Lightspeed offers several trading platforms tailored for active traders, including:
  • Lightspeed Trader: A flagship platform for equities and options trading, offering real-time market data, direct access routing, and customizable interfaces.
  • Lightspeed Web/Mobile: A web-based and mobile solution for traders who need flexibility but still want access to fast execution and advanced tools.
  • Sterling Trader Pro: A platform for professional traders that also integrates with Lightspeed's offerings.
  • Livevol X: A platform primarily for options traders looking for complex strategies and sophisticated analytics.
• 2. Direct Market Access (DMA): Lightspeed allows Canadian traders to route their orders directly to various exchanges and ECNs (Electronic Communication Networks), bypassing middlemen. This is crucial for traders who need low latency and fast order execution, especially in high-frequency trading (HFT) environments.
• 3. Low Latency Execution: Lightspeed is known for its fast order execution, making it suitable for day traders, scalpers, and professional traders who rely on minimizing slippage and ensuring trades are executed quickly.
• 4. Competitive Pricing: Lightspeed offers a tiered commission structure, which is more favorable to high-volume traders. Commissions start low, and as traders increase their trade frequency and volume, they can access even lower rates. For Canadian traders, pricing remains competitive with other international platforms, though the exact rates depend on the asset class and platform used.
• Market Access:
  • Equities: Traders can access Canadian and U.S. stock exchanges, such as the TSX, NYSE, NASDAQ, and more.
  • Options: Lightspeed offers access to options trading with tools for complex options strategies.
  • Futures: Futures contracts on various underlying assets, such as commodities, indices, and currencies, are available to Canadian traders through its platforms.
  • Crypto: In recent years, Lightspeed has added access to cryptocurrency markets, a feature that might appeal to traders who want diversified trading options.
• 5. Support for Professional Traders: Lightspeed is geared toward experienced and professional traders, offering access to advanced risk management tools, custom routing strategies, and API integration for automated trading strategies.
• 6. Education and Support: Lightspeed offers educational resources, including webinars, training sessions, and tutorials to help traders sharpen their skills and learn to use their platforms effectively. Canadian users can access customer support to navigate any platform-specific issues or account-related queries.
• 7. Canadian Regulations and Account Types: Canadian traders using Lightspeed can open accounts through its parent company, Wedbush Securities, but they must be aware of specific regulatory and tax considerations.

Lightspeed Trading (Wedbush Trading) is a good fit for Canadian traders looking for a robust platform for active and professional trading, particularly those who require direct market access and fast executions. However, it’s best suited for experienced traders, as its features and platforms are complex and better aligned with those trading in high volumes or with advanced strategies.