How to start trading futures

1. What a futures contract is

A futures contract is an agreement to buy or sell a particular asset at a future date, with the price and the amount fixed at the time of the agreement. That is the CFTC’s own definition, and two parts of it matter to a new trader. First, contracts are standardized: the exchange sets the size, tick, and expiry, so everyone trades the identical instrument. Second, most contracts are closed before the delivery date, so a trader in stock index futures will never take delivery of anything.

Some contracts allow cash settlement instead of delivery, and index futures such as the E-mini S&P 500 settle financially: the gain or loss is simply credited or debited in cash. The CFTC also notes that most participants in futures markets are commercial producers or consumers hedging their business risk, while speculators attempt to profit from price changes. As a retail trader you are a speculator, and the participants on the other side of your trades are often professionals with better information and lower costs.

2. Read the contract spec sheet first

Every futures contract has a published specification sheet, and reading it is the first real trading skill. Four numbers drive your profit, loss, and risk: the point value, the minimum price move (tick size), the tick value, and the trading hours. Here are the four most traded CME equity index contracts, taken from their current spec sheets:

The worked arithmetic is simple. Suppose you buy 2 MES contracts at 6,000.00 and sell at 6,012.50. That is 12.50 points, or 50 ticks at 0.25 points each, so 50 × $1.25 × 2 contracts = $125 gross, before commissions and fees. The same move on 2 ES contracts would be $1,250. Micros are one tenth the size of the minis, which is why most beginners start with them. The Aeris position size calculator runs this tick-value arithmetic for you when you plan a trade.

Each contract also trades under a month code and expires. Volume typically concentrates in the nearest active contract month, and as expiry approaches, active traders roll their positions to the next month. Your platform’s chart may keep working while the tradable symbol changes, so confirm the month before every order.

• ES (E-mini S&P 500): minimum tick 0.25 index points, worth $12.50 per tick.
• MES (Micro E-mini S&P 500): minimum tick 0.25 index points, worth $1.25 per tick, at $5 per index point.
• NQ (E-mini Nasdaq-100): minimum tick 0.25 index points, worth $5.00 per tick.
• MNQ (Micro E-mini Nasdaq-100): minimum tick 0.25 index points, worth $0.50 per tick, at $2 per index point.

3. Sessions, margin, and mark-to-market

CME Globex lists equity index futures trading from Sunday 6:00 p.m. to Friday 5:00 p.m. Eastern, with a daily maintenance break from 5:00 p.m. to 6:00 p.m. Eastern. The market is open far beyond stock exchange hours, which means it can move sharply overnight while you are not watching. A position held from one session into the next carries that gap risk, and a stop order does not remove it.

Margin is the deposit your broker requires to open and hold a position. It is not the cost of the contract, and it is not your maximum loss. Three mechanics matter here:

• Marked to market daily: the CFTC explains that customer accounts are adjusted to reflect each trading day’s closing market value, so losses leave your account daily rather than at some distant expiry.
• Margin call or liquidation: if losses erode your margin below required levels, your broker will demand more funds or liquidate the position, and the CFTC warns that you can be required to pay more than you invested initially.
• Broker requirements: brokers can require more than the exchange minimum, and many advertise lower day-trading margins for positions closed before the session ends. Lower margin means higher leverage, not lower risk; the contract does not get safer because the deposit got smaller.

4. Choose a broker and a data feed

Three separate things must be in place before you can trade: a broker that holds your account and margin and routes your orders, a market data feed that streams prices, and a platform that displays the data and sends your orders. Some firms bundle all three; others let you mix. Rithmic, for example, is a common futures data and order-routing connection used by both retail brokers and prop firms, and Aeris connects to it directly.

Check registration before depositing anything. The CFTC requires companies and individuals who handle customer funds or give trading advice to register, generally through the National Futures Association, and it requires risk disclosures, segregation of customer funds from the firm’s own funds, and daily adjustment of customer accounts to market value. If a firm is not registered, or will not show you its registration, walk away.

Then compare the full cost stack: commissions per side, exchange and data fees (which depend on the market data entitlements on your account), platform fees, and any inactivity or withdrawal fees. Test the broker’s simulated environment before funding a live account.

5. Your own account or a prop firm

With your own brokerage account, you risk your own capital, keep all profits, absorb all losses, and answer to no rulebook but your own. With a futures prop firm, you typically pay an evaluation fee, prove you can trade under rules such as a daily loss limit and a trailing drawdown, and then trade the firm’s account for a share of profits. The two routes suit different situations: evaluations need little capital but charge fees that repeat when you fail, while your own account has no rulebook but demands real capital and real losses when you are wrong.

Neither route is easier, and neither makes an unprofitable trader profitable. If you explore the prop route, read what a prop firm is first, then our guides to daily loss limits and trailing drawdowns, because those two rules end most failed evaluations. One caution about tooling: Aeris does not track or enforce prop-firm rules, so whichever route you choose, the firm’s own dashboard remains the record of your limits.

6. Simulate before you fund

A simulated account trades fake money against live prices. Use it to learn your platform’s order entry, practice attaching stops and targets, and rehearse your routine at the hours you actually plan to trade. Bar replay, where available, lets you trade through past sessions as if they were live, compressing weeks of screen time into evenings.

Take simulation seriously or it teaches bad habits: use realistic size, honor every stop, and record each trade with the reason you took it. Know its main limitation too. Simulated losses do not hurt, so your first live trades will feel different even when the process is identical. Graduating to the smallest live size, a single micro contract, is the standard bridge between the two.

7. A step-by-step starter plan

Put it together as a sequence. Do not skip steps, and do not fund a live account until step 5 is complete.

1. Pick one liquid contract, such as MES or MNQ, and read its full specification sheet on the exchange website.
2. Write down your risk rules: a fixed dollar risk per trade, a daily loss limit that ends your session, and whether you will ever hold a position overnight.
3. Learn your platform in simulation: entries, exits, brackets, flatten, and where your open orders and working stops appear.
4. Complete at least 50 simulated trades with a written record of every entry, exit, and reason.
5. Review the record. If you could not follow your rules in simulation, live trading will not fix that.
6. Verify your chosen broker or prop firm is registered, read its risk disclosures, and make sure you understand every fee.
7. Fund the account only with money you can afford to lose, trade one micro contract, and review weekly before increasing size.