How to trade futures

For traders who understand the risks of futures, here are the basic steps involved in the futures trading process.

Futures and futures options trading is provided by Charles Schwab Futures and Forex LLC.

1. Select a futures market to trade.

One way to get started is to explore futures that are relevant to the companies, industries, or sectors you're already knowledgeable about. For instance, if you've been a long-time S&P 500 investor, an S&P 500 futures contract may be a market to explore. 

Futures-approved clients can get real-time futures charting and technical indicators inside thinkorswim®, combined with in-depth research and commentary all built into the platform.

Available on thinkorswim trading platforms, predefined futures watchlists can help you discover futures markets.

Note that you'll need a futures trading account to trade futures. Learn more about applying online for futures approval, or talk to a Schwab futures specialist at 877-656-8748

2. Form an opinion, do research, and understand the risks.

Once you've picked a futures market to trade, it's time to form an opinion on its future price movement. 

You can use the Analyze and Charts tabs in thinkorswim to help inform your fundamental and technical research. 

Like with any investment, you should develop a plan for your futures trade before you place it. Once you understand your risk tolerance, identify a profit or hedge objective and an exit plan should the trade go against you.

3. Place and manage your trade.

Once you are ready and you've settled on a specific futures contract to trade, and created a plan for the trade, you can submit an order for execution.  

Using the thinkorswim bid/ask price ladder, enter the underlying symbol to find and select the specific futures contract you want to trade. Next, select your price level, confirm the order details, and submit the order. You can also consider setting up an exit strategy, such as a stop order or bracket order at the time of the trade.

Clients can learn more about trading futures on thinkorswim by logging in to our course.

Have questions about futures? We're here to help.