What are Futures?
Online Futures Trading
With more than 200 tradable Futures contracts available, Fab Investing gives investors access to a wide range of tradable contracts across the world’s busiest futures markets from Chicago to Singapore.
Why trade Futures with Fab Investing?
- Excellent market liquidity and tight spreads on all major contracts.
- Trade over 200 Futures across 19 global exchanges on live prices (subject to subscription) direct from the relevant exchanges.
- Trade a range of products, including agriculture, oil, energy, base metals, precious metals, bonds, currencies, short-term interest rates, meats, softs and stock indices.
- Various order types available: Limit, Stop-Limit, Stop and Trailing Stop.
Introduction to Futures
What is a Futures Contract?
A Future is a contractual agreement to buy or sell a particular commodity or financial instrument at a pre-determined price on a specific date in the future.
Futures contracts can derive from a variety of assets, from traditional commodities like corn and wheat to different asset classes, like government bonds, interest rates, energies and stock indices.
Futures are highly liquid exchange traded financial instruments, meaning individuals can trade on tight spreads. The transaction costs are low, and their pricing is transparent due to the level of specificity found in Futures Contracts, as well as the regulations imposed by the various exchanges.
No physical delivery
Fab Investing does not support physical delivery of the underlying security on expiry of a Futures Contract. On or before the expiry of a Futures Contract, Fab Investing will cash settle a client's positions on their behalf. Read more about expiry of Futures.
Future Trading Conditions
Futures trade on margin
Since Futures contracts are essentially agreements to buy or sell a certain asset at a given date in the future, actual payment does not happen upfront. Instead, buyers and sellers of Futures must place collateral for the trade. This is also known as "margin".
The size of the margin is determined by the Futures exchange and is the same for all traders. Depending on the asset you are trading, expect to be required to place around 1%-10% in margin.
Use your Stock portfolio as margin
To provide you with extra flexibility when managing your portfolio, Fab Investing allows you to use the value of your Stocks as collateral for margin trading. This means you have more flexibility when you spot a great trading opportunity.