The Best Futures Trading Funding Program Right Now

One of the more recent developments in the financial world for independent futures traders has been the rise of several programs that offer funding for day trading.

I remember trading the Nasdaq-100 (NQ) and Crude Oil (CL) futures contracts when they were much cheaper than they are now. The margin requirement to day trade one NQ contract was about $400 at any good broker, and the overnight margin was a few thousand.

Today, it’s anywhere from $1,000 to $2,000 to daytrade, and closer to $25,000 to hold a single contract overnight. I imagine most independent day traders don’t have anywhere near that much money starting out, not to mention the ability to withstand multiple $750-$1000 trends on any given day.

If it was tough for me to put together the funds for futures back then, as a fresh college graduate, it’s going to be even tougher for a new trader today. A single mistake today in an active market can cost over $1,000 per contract in just a few minutes.

What if I have enough capital already?

Having a larger account may make things easier, if you have the funds for it. If you do, great! You should probably begin with micro futures to limit your risk, because the most preventable losses often occur in the beginning. But why risk your own capital at all?

Chances are, if you’re new on your journey to trading mastery, you do not have several thousand dollars to dedicate to a trading account yet.

You may consider asking a friend for a loan so you can risk their money while trying to build capital of your own. This can work for some, but I advise against it, especially for beginners.

So what’s the solution?

For futures, a common recommendation is having $5000-$10000 per contract that you plan to trade. Day trading margins are not usually this high, but to withstand large drawdowns during volatile markets, you should have plenty of breathing room. Otherwise, you will open yourself to the possibility of the dreaded margin call (not a bad movie, by the way), or having your position liquidated by your broker.

However, many novice traders will not have a spare 5 or 10 grand to start trading a single futures contract. Their best option lies in the opportunity presented by online prop firms. The rise of these funding programs for futures trading have provided an opportunity that did not exist in the early 2000s.

These prop firms promise a fully funded account of their own money, effectively removing all risk to a trader’s personal funds. The catch? You have to prove that you are a profitable trader to get it.

If you are a total beginner, this may sound daunting. But if you put in some serious effort to learn (or you already know how to trade and simply needed more capital), this is by far the safest and cheapest way to do it.

What Is Futures Trading?

Before we get to the funding options, let’s make sure we’re on the same page with the basics. What is futures trading exactly?

Futures contracts are a type of derivative contract agreement to buy or sell a specific commodity asset or security at a set future date for a set price. Futures contracts, or simply “futures,” are traded on futures exchanges like the CME Group. They require a brokerage account, which needs approval to trade futures.

Imagine you don’t want to day trade shares of a company like Apple or Tesla. Instead, you want to trade gold, or crude oil, or a large index like the S&P 500. If you are a large oil company, you might call one of your contacts to make a deal for 30,000 barrels of crude oil at once.

When farmers or large corporations or other entities are making bulk orders of some of these commodities, they use futures contracts to lock in specific prices that will be used at some future date when a transaction is to be made.

Day traders, on the other hand, utilize the market for these same contracts. But instead of making plans to acquire physical assets or securities, they capitalize on day-to-day fluctuations in these markets. Hundreds of thousands of contracts are being traded every day, with the majority of the participants having no interest in the physical commodities.

Advantages of Futures Trading

Futures trading comes with many perks when compared to the other more restrictive markets like the stock and options markets.

For example, the U.S. stock market is open from 9:30 AM to 4:00 PM Eastern Standard Time (EST). The futures market, which is a global market, doesn’t operate on U.S. times. The trading day runs from 6 PM to 5 PM EST the next day, Sunday through Friday.

This 23 hour-per-day system allows traders from all over the world to carve out the hours that work for them. If they wish to trade an American index, they can, regardless of what country they are from. They don’t need to register for an account at an American broker to do so.

In addition, the profit potential (and risk) in futures is greatly increased, due to leverage.

When you put $1000 into a stock trade, your position typically only controls $1000 worth of shares. A 2% move will earn or lose about $20, not including commissions.

In Futures, traders may use leverage of over 100 times the amount of capital they invest. A 2% move on your $1000 with 100x leverage would produce a profit of $2000, tripling the investment. The stakes are raised when leverage is involved, but it is a massive advantage for the skilled trader.

Unfortunately, having a few thousand dollars to trade futures comfortably is not always an option. This is where funded trading programs offer an opportunity unlike any other.

What Futures Trading Funding Programs are Available?

If you’ve heard of any of these companies years ago, it was probably TopStep Trader. TopStep first emerged in 2010. Their marketing team must have been pretty good, because I heard of TopStep Trader long before any other companies made their presence known. I dug through forums and considered more outdated prop firms before finding that there were any true competitors at all.

But once I learned about the other options available, I decided I needed to explore each of them. I knew this would give me a chance to day trade full futures contracts with extra confidence. If you find yourself in a similar position, you’ve come to the right place.

It’s important to note that there are at least ten different funding programs available for futures trading in 2022. This means that even if you have an issue with some, you can probably find a program that suits you. Keep in mind, these companies are all in direct competition with one another. The evaluation and funding process, account sizes available, rules, and costs involved vary slightly. But for the most part, these programs are nearly identical.

These are the futures trading funding programs I’ve explored so far.

• Apex Trader Funding
• Apteros Trading
• BluSky Trading
• Bulenox
• Earn2Trade
• EliteTrader Funding
• LeeLoo Trading
• OneUp Trader
• TakeProfit Trader
• TickTick Trader
• TopStep Trader
• Trade Day
• UProfit Trader

Of these companies, most of them have a requirement or two that I consider a deal breaker. This could be an extremely high subscription cost; one firm’s evaluation price was ludicrous to the point that I didn’t even include them on this list.

Or, they require an unnecessarily long evaluation period; Earn2Trade has recently remedied this problem with their mini gauntlet.

I have also heard lackluster reviews of some of these companies (stories of over-managing the traders at TopStep a few years back), and some of these risks are simply not worth it to me.

However, I still recommend going through at least one of these programs, both to test your strategy more realistically, and to ultimately remove your personal risk by earning your own funded trading account. If your strategy and trading discipline are already good, you should have no problem passing the evaluation phase at any of these companies.

If you’re interested in learning about the cost, the rules, and more, I’ve done a multi-part series that begins here.

Which Futures Trading Funding Program is the Best?

So which of these programs is the best?

As of October 2023, think there is currently a clear winner in this debate. OneUp Trader seems to be the best futures funding program right now…but it still depends on your trading style. My second favorite is Apex Trader.

OneUp Trader is competitively priced to begin with, but when factoring in the absence of a market data fee, they become the cheapest. Some futures funding programs have an account activation fee, monthly account fees, or other unnecessary expenses attached. OneUp has completely refused to use these tactics and kept it simple for their traders.

However, the rules at OneUp are far more restrictive than what you’ll find at the average firm. Depending on your trading style, this may be a serious limitation. At other firms, such as LeeLoo Trader, you will deal with a monthly fee upon getting funded, but also enjoy a much less restrictive trading account. If this freedom greatly improves your trading, the extra fee will seem like an afterthought.

The Main Factors to Consider

The main factors to consider when choosing a funding program are:

• Rules of the evaluation
• Length of the evaluation
• Cost of evaluation
• Account size and contract sizes allowed (some will involve scaling targets to trade larger size)
• Other fees (market data fee, account set-up fee, trading platform fee, and more)
• Freedom (or lack of freedom) to trade your strategy
• Withdrawal process (you ultimately want to get paid and build your own capital, don’t you?)

How I Compare Funding Programs

When it comes to a futures trading funding opportunity, I look for the following: a relatively quick and affordable evaluation, freedom to trade the way I want to, a competitive profit split, and straightforward withdrawal system.

Some companies excel in one area but fall flat in others, and none of them are truly perfect. With that said, I still consider OneUp Trader to be the best option for traders on a budget.

One of my biggest gripes is the inclusion of a monthly fee of any kind, after passing the evaluation phase. Let me explain.

The evaluation process in these programs is often a monthly subscription, charged each month until you pass the test. After passing, this monthly subscription ends, and the process of setting up the funded account begins.

However, some companies require traders to pay for a market data fee, account setup fee, or some other fee at this stage. Some of these fees are billed monthly from the moment this funded trading account is created. This is in addition to the regular costs of trading (losses, platform fees, commissions, etc.).

The fact that some programs waive the market data or unnecessary setup fees proves that it doesn’t have to be a part of the cost, and yet some more expensive companies continue to stay behind the curve on this. To me, it just feels like those stores that charge you a transaction fee for using your credit card.

It may not affect you, but for traders with limited capital starting out, reducing unnecessary fees should be a priority. When it is as easy as selecting a different futures trading funding program, it’s worth weighing these options.

Hope for the Near Future

Considering that these companies are well aware of their competition by now, they will likely adjust their systems over time. I expect futures traders will discover that more trading programs are willing to waive these fees in the near future. If not, they will simply lose potential clients who share my view on keeping unnecessary expenses low.

To learn more about why I prefer this program specifically, you can check my review of OneUp Trader here.

I will be going into depth while evaluating each company separately, so be sure to check out those reviews as well!

Conclusion

In this article, I wanted to briefly explain the reasoning behind why I think OneUp Trader offers the best opportunity. I will be covering each of the trading funding programs in depth separately. But as for OneUp, they are not far and away the best in every way. Other futures funding programs may be more suitable to you based on the set-up, account sizes available, specific restrictions or lack thereof, and so on.

For example, OneUp Trader and several other companies do not permit funded traders to place trades during large news releases. This may sound logical, as it prevents traders from exposing themselves to massive risk during the most volatile and chaotic news events.

However, it also prevents traders from taking advantage of these moments at the same time. A good trader might have prepared for the news release in advance, and simply cannot be in his trade prior to the release because of this rule. I have found myself in this position many times, wishing I was able to trade the news because I was prepared for it.

If you are a trader who takes advantage of news events, as I sometimes like to do, this rule may be an obstacle and a reason not to consider OneUp Trader. Accidentally keeping a position open during these important releases can result in losing your funded account, and that’s never a good way to start the morning.

To learn more about each funded program in detail, check out the first part of my in-depth series here.