Futures Trading: Platform Example

Futures Trading Platforms – Order Entry Screen #

The screenshot displayed below showcases the trading platform, Optimus Flow. While different futures trading platforms may have slight variations, they generally share similar functionalities.

(A) Contract Identification: #

This field provides information about the futures contract you are trading. It typically includes the following details:

  • Futures commodity symbol
  • Contract month symbol, year, and expiration date
  • Each futures contract has a unique symbol that distinguishes it from other products.

(B) Order Quantity: #

  • This field allows you to specify the number of contracts you wish to buy or sell.

Specify the Type of Order:

  • Market Order: This is the most basic order type, which aims to execute the order promptly at the best available price. With a market order, you don’t specify a price. You only need to provide the following information:
  • Contract name
  • Number of contracts
  • Buying or selling preference
    Market orders are automatically filled at the best available price, and you receive immediate order fill information.

(C) Bid Price Levels #

This column displays the price and the number of contracts that potential buyers are actively bidding on. Only the top 10 bid price levels are typically shown.

  • Stop Order: A stop order is triggered to buy if the market rises to or above a specified price (the stop price), or to sell if the market falls to or below a specified price. When the stop price is reached, the order becomes a market order and is immediately filled at the best available price. Traders often use stop orders as part of their risk or money management strategy to protect gains or limit losses.
  • Limit Order: A limit order is conditional and allows you to specify the desired price in advance. If you are a buyer, your limit price is the maximum price you are willing to pay. If you are a seller, it is the minimum price at which you are willing to sell. The advantage of a limit order is that it enables you to dictate the execution price. However, unlike a market order, there is no guarantee of immediate execution. If the market does not reach your limit price or if trading volume is low at your specified price level, your order may remain unfilled. Only the top 10 offer or ask price levels are typically displayed. The combined bid and ask information shown in these columns is commonly referred to as market depth or the order book.

(D) Depth of Market #

  • This column provides insights into the number of contracts traders are willing to buy (bid) and sell (ask) at different price levels. Bids are shown on the left side, while asks are shown on the right.

(E) Last Completed Trade Price #

This field displays the price at which the most recent trade was completed.

STOP ORDER: An order that becomes a market order when a particular price level is reached. A sell stop is placed below the market; a buy stop is placed above the market. Sometimes referred to as a stop loss order.

LIMIT ORDER: An order that allows the buyer to define the maximum price to pay and the seller the minimum price to accept (the limit price). A limit order remains on the book until the order is either executed, cancelled or expires. Any portion of the order that can be matched is immediately executed.

Connecting Your Platform to the Commodity Futures Exchange #

Once you have deposited your funds and chosen a platform, your futures broker will provide you with a username and password. These credentials will enable you to connect to the commodity futures exchange and access quotes and charts for the markets you trade. This process is applicable across various trading platforms and brokers.

It’s important to recognize that not all brokers can assist you in selecting platforms that are suitable for your experience level and trading objectives. These two factors are crucial because your trading platform serves as your primary interface with the markets. Therefore, it’s essential to choose wisely.

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