Switching to futures trading involves unique considerations compared to other markets. Traders transitioning to futures should take the time to understand the fundamentals and nuances of this market. For those new to futures, we strongly recommend starting with small position sizes to build confidence and familiarity.
Regulated Brokers & Markets
At The Edge Funder, we partner with a regulated broker to ensure all trades in Live Funded Accounts are executed on centralized, regulated exchanges. These exchanges provide consistent quotes and market liquidity from genuine third parties, ensuring secure and transparent trading experiences. The centralized nature of futures markets offers traders reliable fills and consistent pricing across platforms, giving peace of mind while trading.
Contracts & Leverage
Leverage in futures trading differs significantly from markets like forex or crypto. Each futures product has a specific minimum tick value and price per tick. A tick represents the smallest price movement for a product.
For example, the ES Mini (S&P 500 futures contract) has a tick size of $0.25, with a tick value of $12.50. This means that every $0.25 movement in price corresponds to a $12.50 movement per contract, resulting in a leverage ratio of 50 ($12.50/$0.25 = 50).
Futures contracts are standardized, and trades are executed in multiples of a contract, with no fractional shares allowed. Each product has distinct characteristics, including tick values, behavior, and leverage, which traders must understand before engaging in the market. Additionally, traders are subject to maximum position sizes as outlined in their account parameters.
Contract Rollover
Unlike stocks or forex pairs, futures contracts have expiration dates. Each month is represented by a code attached to the product’s symbol. Contracts expire, and trading activity transitions to the “front-month” contract, which has the highest volume and liquidity.
For example, ES (S&P 500 futures) contracts expire quarterly in March (ESH), June (ESM), September (ESU), and December (ESZ). To distinguish contracts by year, a digit is appended to the symbol, such as ESH3 for the March 2023 contract.
Traders should always trade the contract with the highest volume. Tools like the CME Group’s search feature can help identify active contracts, open interest, and expiration details.
Commissions & Fees
When trading futures through The Edge Funder, utilizing Volumetrica with DXFeed data, all commissions and fees are included with each funded account, ensuring a seamless trading experience.
✅ No fees for pre-live account users
✅ Market data is provided through DXFeed via Volumetrica
✅ Full market depth (Level 2 similar to Bookmaps) data access for enhanced trading transparency
Since commissions and data costs are covered within each funded account, traders can focus on execution without worrying about additional trading fees. For more details on account structures and trading conditions, please reach out to The Edge Funder’s support team.
Conclusion
Understanding the rules, intricacies, and details of futures trading is essential for success. Traders should leverage resources like the CME Group and other educational platforms to gain comprehensive knowledge of the products they plan to trade. Being informed is the key to confidently navigating the futures market and achieving trading success.
