Futures contracts play a vital role in the modern market, especially when it comes to agriculture and resources. Whether you’re a buyer or a seller, it can help you protect your assets against unexpected losses. But even the futures market hasn’t been able to resist the advancement of technology. While people once used to hold these meetings in person, they now form deals online. To do so effectively, you’ll need a good broker.
Summary
The biggest differences between Interactive Broker, thinkorswim, & Paradigm Futures are the way they structure their fees and the support they provide. From this comparison, you’ll see that Paradigm Futures is the best option to go with when you consider the safety and support they provide.
This article will look at the 3 leading futures market brokers – Interactive Brokers, thinkorswim, and Paradigm Futures. Here are some topics we’ll cover:
- Interfaces
- Fees
- Information
When and why should you form a futures contract?
Before we examine some of the most prominent brokers in the industry, let’s look at what a futures contract is. It is a legally binding contract specifying the quantity and time of a certain trade. You’ll run into it when dealing with crops and natural resources such as oil. The idea is to bypass the unpredictable future.
There are two types of people who deal with futures contracts regularly. The first one is the so-called commercials. These people are either producers or processors of a certain resource.
Consider owning a large span of agricultural land. Say you want to use it to cultivate corn. And once it grows, you plan to sell to a certain buyer. Striking a futures contract ensures the sale goes through, even if the buyer could find a cheaper alternative.
It’s also useful for companies that process resources. Settling on a price early gives it stability even if the costs climb up.
The second group of people who get into futures contracts are speculators. Speculators treat futures contracts as a stock market. They look for opportunities, trying to buy cheap and sell high. However, they are rarely involved in the actual market directly.
Interactive Brokers vs. thinkorswim vs. Paradigm Futures – which one is the best futures broker?
If you plan to enter this market, you’ll need a good broker. Today’s most popular choices are Interactive Brokers, thinkorswimg, And Paradigm Futures. However, each one has its pros and cons. This table provides a brief overview of each broker:
| Broker | Overall cost | User Interface | Information and Analytics | Financial security |
| Interactive Brokers | Low | Excellent | Poor | Great |
| thinkorswim | Affordable | Excellent | Poor | Great |
| Paradigm Futures | Affordable | Excellent | Excellent | Excellent |
- Overall cost
Cost is arguably the most important factor you should consider when choosing your futures broker. Contrary to popular belief, it’s not the best idea to go for the cheapest option you’ll find. Although it may appear appealing at first glance, cheap futures brokers generally don’t offer protection and financial security. Moreover, cheaper options rarely come with counseling and financial advisors. If you wish to find a reliable futures broker, paying a bit more will be worth it in the long run.
Take Interactive Brokers. Their marketing campaign promises you no commissions on your sales, making it look very promising. But once you get to know the company better, you’ll notice several fees you must pay to use it. These include notice desk fees and risk fees, among others.
thinkorswim is built on a similar design. Much like Interactive Brokers, it offers a 0-dollar commission rate. But as you continue to use it, the fees will pile up. thinkorswim also lacks advisors, meaning you may have to contact another third-party service.
Paradigm Futures is the most expensive option on our list. However, it’s also the most reliable one. It offers a 65-dollar charge per round turn. While it may seem like a lot, the company has several experienced brokers that can help you set up your contracts. In terms of customer service, it easily comes out on top.
At the end of the day, it is your money you invest. Paying a broker will always be cheaper than your sales. If you choose the wrong one and mess up your contract, you’ll suffer much larger losses. Thus, we recommend going for Paradigm Futures as it offers the best value for money.
- User Interface
The user interface is the second most important factor when it comes to choosing your broker. The futures market fluctuates constantly, and predictions can change in a span of seconds. Thus, you must be able to monitor it as often as possible.
Luckily, all three brokers keep up with the time in this regard. You can access them from any platform, whether a computer or a smartphone. However, you’ll still need an Internet connection.
Paradigm Futures also offers 24-phone access. Since it is an American company, its official hours are from 7:30 am to 7 pm Central Standard Time. You can call outside of these hours, too, albeit for a fee of $3 per filled contract.
- Information and Analytics
Access to information and analytics is another aspect to keep in mind. Since the market changes frequently, you want to have your data as accurate as possible. It also helps if your broker offers financial advice.
Sadly, Interactive Brokers and thinkorswim don’t come with a commodity broker. While this makes them more affordable, it makes them a bit less reliable to work with. The futures market never stays the same for too long. Without precise information, you won’t be able to make educated decisions about your sales. It makes Interactive Brokers and thinkorswim less appealing.
Paradigm Futures trumps both the previous options when it comes to information. With it, you can look at RJ O’Brien’s market insights whenever you want to. RJ O’Brien is the greatest futures commission merchant in the US. If you choose Paradigm Futures, you can access some of the best data analytics on the market. It will make your futures trades much more successful.
- Financial security
The final factor you must consider is financial security. This is similar to when you choose a bank for your business. Since the economy goes into decline every once in a while, you need to know your broker can survive it. Otherwise, you risk losing your assets. Many futures merchants have put their trust in the wrong company, only to lose all their hard-earned savings.
Both thinkorswim and Interactive Brokers have been around since the late 20th century. It gives them some credibility when it comes to financial security. Both are reliable companies, a fact that will likely not change any time soon.
However, Paradigm Futures has the most years behind it. It’s been around since 1914. During this time, it has survived several financial crises. These include the Great Depression, hyperinflation, and even the covid pandemic. It gives it the most credibility out of all three futures market brokers.
Interactive Brokers vs. thinkorswim vs. Paradigm Futures – Our final verdict
Now that you understand the different factors that influenced our decision, it’s time to look at the winner.
The factors we considered when determining the best futures broker were the following:
- Cost
- User Interface
- Information
- Financial security
The cost determines how much you pay for the service, including any hidden fees that don’t show up on the company’s website. The user interface and information represent the value you get for this price. And finally, financial security ensures the company won’t go bankrupt any time soon.
The best futures market broker is Paradigm Futures since it brings the most benefits to the table. Its only drawback is the price. But while it may be higher initially, the benefits you gain are more than worth it.
Paradigm Futures is accessible from most devices, provided you have Internet access. It’s also the only option on our list that offers analytics and financial advice, making it the best futures market broker for long-term trading. Paradigm Futures has been around for over a century, meaning it has a history of success behind it.
