How To Trade Futures on thinkorswim® web

Trading futures on thinkorswim^® web allows you the ease of placing trades without having to download an application.

The platform is straightforward. It takes many of the essential tools from the thinkorswim software and makes them easier to access and learn.

I'm going to show you how to enter, check in on, and exit a futures trade using thinkorswim web.

Remember, with all versions of thinkorswim you can toggle between live trading and paperMoney^®. paperMoney is the virtual trading experience that lets you practice trading on thinkorswim using real-time market data—all without risking a dime.

I’m going to place this trade using paperMoney, which works similar to how a live trade would.

Okay, to get started, log into thinkorswim web through schwab.com. You can find it through the Trade tab and navigating to the thinkorswim platforms page, or you can go to trade.thinkorswim.com. To search for a futures contract you’d like to trade, just type the symbol in the search bar. For our example today, I’m going to open a short position on the E-mini S&P 500 futures. I’ll type /ES in the search bar and a list will populate with active contracts.  I’ll find and select the /ES[H24} contract for the E-mini S&P 500, which brings me to a summary page.

Also known as the quote details page, it provides a lot of basic information about the contract you're trading, like the volume, days to expiration, and margin requirement.

For traders interested in options on futures, you can select the arrow near Options Chain, where a dropdown menu will let you select up to four legs. You can also navigate to one of few preselected options strategies like an iron condor or a calendar. Options futures trades are similar to regular options trades, with some key differences, so be sure to check out our other thinkorswim videos to see how to do that.

Also, we’re demonstrating how to start through the search bar but if you're still not sure which contract you want to trade and want to research what's available, go to the Watchlist tab, back out to the main menu, and select Browse Categories. Next, select Public and then Futures. These are the currently available futures contracts.

When you've selected the contract you want to trade, you can use the Active Trader ladder and Level II quotes to track live information about the trade. Click the Active Trader tab to get up-to-date information like bid/ask prices, volume, and profit and loss values. In the dropdown menu, you can place orders, get more granular pricing, and you can select Auto Send quickly enter or exit a position without confirmation.

Level II is a thinkorswim gadget that displays the best ask and bid prices for exchanges where stocks, options, and futures are traded. It’ll give you a real-time, ordered list of best prices for an underlying that allows instant order placement.

Like I said earlier, I'm shorting the E-mini S&P 500, so I'll select Sell to pull up the order editor. Note that if you selected Buy by mistake, you can change it here. The order editor allows you to specify order type, quantity, price, and time in force.

For this example, I'm going to set the trade at one contract, the order type to Market, and the time in force to Day. I’ll then select Review to double check the details, where there are a few things to note. One is the initial cost of placing the trade; this number is what I'll be paying in fees and commissions. The others are related to changes in buying power due to the maintenance margin requirements for the account. Once I’ve double checked everything and am happy with it, I'll click Send.

To check the status of the order, I'll go to Positions and there it is. It’s filled. The Positions tab is also where I can check the profit and loss for the day, since the open of the trade, and year to date, which displays all trades on the symbol for the year. So, now let’s say I want to close a position. Staying in the Positions tab, I'll select the futures position I just opened. Here, I can choose Close Selected, which brings me to the order review page. This time, I'm going to buy in order to close the short position. I’m going to change the order type to Market and the time in force to Day and select Review. Just like when the trade was opened, you can see the cost of placing this trade as well as the changes to account’s buying power. I'll make sure to review all the details and, if there are no changes to be made, select Send. To make sure it filled I'll go to positions to see the status of the order. And it’s filled.

Now that you know how to place futures trades using thinkorswim web, you can continue practicing in paperMoney to build your confidence before placing live trades. To learn more about thinkorswim and futures trading be sure to check our education offering on schwab.com and on YouTube.