Futures Prop Firms – What, Why, & Who

Unless you live under a rock, you probably know that futures trading has gotten popular. Everyone and their mother is trading futures!

So, futures prop firms are rising to the increased demand from traders. These firms give traders the chance to earn margin capital for trading futures. Now, you and your mom don't have to fund your own futures accounts.

With these prop trading firms you can trade a nice variety of futures contracts. A futures contract is an advanced derivative that lets you bet on the direction of an asset using leverage.

And the firms below will set you up to trade futures contracts for whatever your heart desires. You can trade stock indices like the S&P 500 and Nasdaq. Place your bets on commodities (like gold, oil, and silver). Speculate on currency and interest rates, like treasury bonds.

Futures prop firms offer proprietary traders access to a large portion of the financial markets. They're suitable for both short and long-term trading, but most prop trading is short-term day trading.

Why are There So Many Futures Prop Trading Firms?

The best prop trading firms offer futures trading for a number of reasons:

• Futures markets are liquid and transparent, with all trades taking place on a central exchange visible to all participants.
• Futures give traders lots of leverage, which allows the prop firms to provide more buying power with less capital.
• Regulators monitor futures exchanges are regularly, but differently from the stock market. So it's logistically easier to offer prop firm accounts for futures, versus stocks or options.

Prop Firms for Futures

The following prop firms offer futures trading (in alphabetical order):

What's the Best Futures Prop Firm?

We ranked the best prop firms for futures for a bunch of factors, like pass-ability and shortest time-to-payout. 

You'll notice that all the props on that list offer futures trading, not forex or CFDs. I avoid those, and so should you.

Bottom line, those other products just aren't a good option for traders. They have too many flaws and room for abuse, and forex is where all the prop firm fraud has occurred. It's also where we see most scammer "gurus" operate. See some other differences between futures vs forex.

You may also wonder..."Why are the best firms listed all online firms, not stock prop firms or options trading firms? Why aren't there any "brick-and-mortar" or "traditional" prop firms?"

That's because most traders come here looking for advice on online prop firms. They mostly want to trade remotely on their own hours, but with additional access to capital. And, most of traditional firms, including the one I've traded with, aren't accessible to 99.99% of traders. I talk more about those in this breakdown of prop trading.

Futures Funding Prop Firms Pros and Cons

Let's look at some of the pros and cons of futures prop firms. We'll check out some of the cons first.

Unfortunately, futures funding props have one big limitation - They don't offer stock trading or options. To find a stock trading prop firm, you'll have to join a traditional firm, which can be tough. The same goes for options prop firms. Hopefully that will evolve.

Also, you may experience data outages and glitches with prop firms from time-to-time. This has happened at every prop firm I've been a part of, whether online or on a desk.

Traders have to be on top of their game. They have to keep their systems in tip-top shape and manage risk. They reduce glitches and make sure a little glitch can't wipe them out. Everything is the trader's responsibility.

Prop trading is insanely hard. Think of something impossible, and success in trading is close to that.

Whether you trade stocks or a wide range of other instruments, it is extremely difficult. Very few traders succeed, out of many who try. You may find it difficult to hit the profit targets set out for you without exceeding loss limits.

Now we move onto the pros:

You get to trade for the potential of a profit split while gaining trading experience using included market data. Compared to using your own money, you can take less risk pursuing a trading career this way.

You can qualify for tens of thousands in capital while only risking your subscription fees. Instead of risking tens of thousands of your own money, you can risk a tiny fraction of that to qualify for a funding account. 

Some firms offer education in various trading styles. Some broadcast live trading with professional traders who have a proven track record. The highest paying prop trading firms send hundreds of millions in profit shares to their traders.

What Should You Expect from a Futures Funding Firm?

1. Responsive customer support. They should get back to you in a reasonable amount of time when you reach out. Note, this doesn't mean you'll get your way, and it doesn't mean you can treat them like garbage and still get good service. Prop trading is a different kind of business - the customer isn't always right.
2. They do what they say. They fund accounts and pay out profit splits on time, and in-line with the terms they give on their site.

Conclusion

Hopefully now you have a better grip on the what, how, and why of futures props. If you want more, check out the best prop firms list here.

Related Articles