Primary differences between Futures and Stocks/ETFs (for US markets)

The following are the primarily differences between trading in futures versus trading in stocks and ETFs.

Parameters Futures Stocks & ETFs
Accounts Futures account needed Trade from a securities account
Account documentation
  • Account application
  • Risk and disclosure documents
  • Net-worth information
  • Electronic trading disclosure
  • Quote data fee disclosures
  • Securities account application
  • Margin account application (if applicable)
  • Net worth and income requirements
  • Options disclosure documents
Margin and Leverage Performance bond margin, usually 1-5% of notional amount 50% deposit, 50% borrowed at broker loan rate
Exchanges Trade on futures exchanges i.e. CME Group Trade on stock exchanges i.e. NYSE, Nasdaq
Diversify Assets All asset classes represented - Equity, FX, Interest Rates, Commodities Listed stocks and categorized as equities. Some ETFs allow investors to gain exposure to asset classes such as IR and Commodities.
Regulation Regulated by CFTC Regulated by SEC
Ownerhsip vs Legal contracts Legalized contracts to buy or sell a certain amount of a commodity/instrument by a certain expiry date Stockholders own a share in the company business
Dividends paid No Yes
Taxes on short term gains 60/40 rule (United States) Ordinary income
Investor protections CME clearing house SIPC


Updation History
First updated on 9thth October 2020.