Interactive Brokers vs. E-Trade vs. Paradigm Futures

Do you buy or sell agricultural goods? You may own a farm dedicated to selling one type of crop. Or you purchase raw produce to process into goods. You may also be an aspiring speculator in the stock market field. Whatever the case, you’re likely no stranger to the futures market. This industry involves setting up complex business contracts to minimize the risks when you sell or buy certain commodities. It can be quite profitable with the right knowledge.

But knowledge won’t be the only factor to determine the scale of your success – choosing the correct one is just as important. A poor choice may cause you to lose all your hard-earned assets, which many merchants in the field learned the hard way.

Summary

The biggest differences between Interactive Brokers, E-Trade, and Paradigm Futures are the fees and the support provided. Paradigm Futures works with the oldest futures trading platform on the market and is the best out there for the purpose.

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Luckily, we prepared this guide to help you find the perfect match for your futures trading. We outline the top 3 options, examining the pros and cons of each.

What do you gain from forming a futures contract?

Although understanding which futures broker is the best option for you is important, let’s look at the basics first. After all, you should know when people form futures contracts and why they do so.

A futures contract is a legally binding agreement about a future sale. It specifies the exact date, quantity of traded goods, and even the price. Futures contracts are popular in the agricultural field because it is very unstable. They’re also important when it comes to trading natural resources such as crude oil.

If a brewery wants to stockpile hops, it can’t predict potential heat waves or other adverse conditions that will affect the growth of this crop. The price of crops depends on the balance of demand and supply – if the supply is low, they will often cost more. A futures contract sets a fixed price that protects the buyer from high expenses.

A futures contract can also benefit the seller since it legally binds the buyer to purchase the goods no matter what.

But the futures market isn’t limited to just agriculture. The other group of people who dabble in this field is the so-called speculators. These are investors who predict the fluctuations in the market and use them to multiply their assets. It’s essentially the same as the stock market. A good broker is even more important for speculators because their field is much riskier.

Interactive brokers vs. E-Trade vs. Paradigm Futures – which one should you choose and why?

Before you launch your futures market career, you’ll need to choose a trustworthy broker. A good broker can provide you with financial aid and invaluable information and analytics that will help you make smart investments. However, not all futures brokers are made the same. Some are better than others.

Below we compare the pros and cons of Interactive Brokers, E-Trade, and Paradigm Futures. The chart provides a brief overview. We discuss the details of our evaluation under the chart.

BrokerAffordabilityEase of useData analysisFinancial security
Interactive BrokersLowExcellentPoorGreat
E-TradeAffordableExcellentGreatGreat
Paradigm FuturesAffordableExcellentExcellentExcellent
  1. Affordability

Your available funds will dictate how much you can invest at any given time. Thus, having sufficient funds is very important for futures trading. But first, let’s address a common misconception.

Many people believe that saving up on brokers is a good idea since it leaves you with greater funds. But this is a self-destructive strategy. While you may be able to save up some money in the short run, you open yourself up to a bigger risk. A broker is an important asset, and if you choose a cheap one, you put yourself at a huge risk. The price often reflects the quality of service – the lower the price, the lower the quality.

Another factor to consider is hidden fees. Some options cleverly hide some of their fees, making them appear cheaper than they are. Interactive Brokers are the perfect example of this. Although they promise affordable services, it is in name only. Before you know it, you’ll be swimming in a sea of unexpected expenses.

E-Trade hums a similar tune. It appears cheap but comes with several fees you won’t notice until you choose it as your broker. E-Trade is also limited in the types of trades you can perform, meaning it’s not suitable for everyone.

In terms of costs, Paradigm Futures is easily the most expensive one. But in this case, we can confirm that the price matches the service quality. It comes with many financial advisors as well as an above-reproach customer service that makes for great value for money.

A good broker will help you make the most out of your investment. Although Paradigm Futures may be slightly costlier, they will help you make the most out of your futures trades. Your earnings will thus far outshine any service fees they may charge.

  1. Ease of Use

Regarding ease of use, it’s hard to determine the winner. Since we live in an era of intense digitalization, every company has a specialized tech department to keep up with the latest demands. As a result, you can access the services of these brokers from the comfort of your smartphone. It is important since your smartphone allows you to check the current trends no matter where you are.

You can access Interactive Brokers, E-Trade, and Paradigm futures from most types of devices as long as you have Internet access.

Paradigm Futures also comes with 24-hour phone support that is free of charge during its office hours.

  1. Data analysis

Data analysis refers to the brokers’ ability to help you make the most out of the current market trends. Since it is a very unstable market, having access to accurate data is extremely important. But what’s even more important is the ability to understand how to use this data to its full potential.

No other broker can beat Paradigm Futures in this regard. With insights from RJ O’Brien, you can make the most out of the ever-changing market trends. Interactive Brokers and E-Trade simply pale in comparison to this mogul among futures merchants.

  1. Financial security

Financial security is perhaps the most important factor of all, second only to the overall cost of services. After all, a broker won’t do you much good if it goes bankrupt next month. Many merchants have lost their financial assets because they trusted the wrong broker. But their failure is our lesson.

But how do you determine whether a broker is trustworthy or not? The answer is simpler. The longer it has been around, the more trustworthy it is. It is because the economy is not stable. Throughout the years, it has gone through periods of prosperity and decline. Suppose a broker exists even after several eras of economic decline. In that case, it means it’s led by smart leaders who can keep it afloat no matter what happens.

All three companies have been around for a long time. But while Interactive Brokers and E-Trade are several decades old, Paradigm Futures has been around for over a century. It makes it an incredibly reliable company to choose as your futures broker.

Interactive Brokers vs. E-Trade vs. Paradigm Futures – Our final verdict

After comparing all 3 futures brokers based on the 4 most important qualities, it’s clear that Paradigm Futures is the best option for aspiring futures merchants. Its only drawback is the slightly higher price you must pay for the services. However, the services the broker provides are more than worth it. If you’re serious about dealing with the futures market, Paradigm Futures is your best bet.

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