Trading Futures in Australia [How to Get Started]

So, you’re interested in trading futures in Australia? This guide will take you through the basics of futures trading and provide you with tips on how to get started.

One of the defining features of futures trading is the use of margin and leverage. Rather than paying the full value of a contract upfront, you only need to deposit a portion of the contract’s value. This amount is known as the margin.

The specific margin requirement depends on the exchange, the broker, and the volatility of the underlying asset.

Leverage comes into play because your initial outlay (the margin) is only a fraction of the total contract value, allowing you to control a much larger position than you could with the same amount in a traditional purchase. For example, with a 10% margin requirement, a $2,000 deposit lets you access a $20,000 position in the market.

It’s important to keep an eye on your account balance. If your trade moves against you and your equity falls below the required margin level, your broker may issue a margin call. This means you’ll need to top up your account to keep your positions open, or risk having those trades closed out automatically. Leverage can supercharge your gains, but it can also amplify losses—so prudent risk management is key.

What is the Sydney Futures Exchange (SFE)?

The Sydney Futures Exchange, or SFE, was Australia’s primary exchange for trading futures and options contracts. It kicked off operations way back in 1960—believe it or not, it all started with something as humble (and as Australian) as wool! Originally named the Sydney Greasy Wool Futures Exchange, it provided local producers with a way to manage price risks in the wool market.

Over time, the SFE expanded its reach, adding a broad selection of futures contracts: think bonds, interest rates, currencies, and more. The SFE became a big name in the Asia-Pacific region for those looking to hedge or speculate—and if you were in the business of trading Australian government bonds, this was the place to be.

In 2006, the SFE joined forces with the Australian Stock Exchange (ASX), which brought even more products and participants under a single, national umbrella. Today, if you’re trading Australian futures, you’re still benefiting from the groundwork laid by the SFE.

You already know about one of the major benefits of futures trading, direct market connection. This is not the only benefit to trading futures vs options or others, there are many. Let’s look at some of those benefits.

Another benefit of futures trading is that it is often less expensive than other types of trading. You won’t find the same expensive commission structures with futures trading. Instead, you’re charged a fee based on the size of your order. This means that you can trade futures at larger volumes without incurring large costs.

Pattern day trading is where you buy and sell securities based on patterns that you see in the market. The goal of pattern day trading is to make profits by taking advantage of short-term price movements. To do this, you need to develop a rule for how you will trade securities based on the patterns that you see.

A futures trader that wishes to day trade is considered to be a pattern day trader. The pattern day trader rule states that, if you wish to day trade as a pattern trader, you will need $25,000 minimum in your account.

If your account is under the $25,000 threshold, you will only be able to trade 3 intra-day trades per week. This seriously limits a trader’s ability to build an account. The pattern day trader rule is the least liked rule amongst new day traders within the stock market.

Luckily for Futures traders, not such rule exists. Futures traders are able to access the markets with no limits to trade numbers at a much smaller cost.

The futures markets are friendly to futures traders with smaller accounts. As already mentioned, you don’t need $25,000 in an account. You can open a trading account with as little as $400 (USD) with some providers. An account of around $2,000 to $3,000 is a reasonable stating price for some.

Not only are the account size requirements smaller, the futures markets also offer E-mini and Micro E-Mini options. The Micro E-Mini contains the same contracts, but require a smaller margin to trade. This works for smaller accounts to have a lower risk compared to E-Mini futures.

The major futures trading markets are highly liquid, this means that there is a lot of volume traded. The benefit of liquidity in trading is that a trader can enter and exit trades instantly.

In less liquid markets, a trader may need to wait for an opposing buyer or seller to facilitate the trade. If you’re unable to enter into the trade quickly you may enter at a less desirable price. This is not how a futures trader would experience trade execution, as liquidity is high.

The futures trading markets are the most diverse amongst the financial markets. Many asset classes are available to trade, trading futures offers opportunity for diversity.

This is helpful because a diverse range of assets allows a trader to focus on markets worth trading. A given market may not always provide opportunity, and each market has good times to trade. Diversity provides the option to see opportunities across many markets.

Leverage is a major benefit of futures trading. With leverage, a trader can multiply their investment by borrowing against the asset traded. This allows them to take larger profits without needing to risk the full value of the trade.

The use of leverage can increase your profits but also increase the risk of loss. Understand the risks associated with using leverage before taking any trades.

Futures trading offers a level playing field for market makers and retail traders alike. Futures traders receive data direct from the exchange, so they get the ‘true price’. This means that you get the actual market value and not a broker’s interpretation.

The margin requirements for the major futures trading markets rarely change. This means that traders know what to expect when it comes to how much margin is required per contract.

The pricing for trading futures is far simpler than that of options contracts where things like time decay come into play.

The futures trading markets are among the most regulated. When it comes to trade most other products, a trader needs to put faith in their broker. A broker isn’t concerned with your success as a trader, and in some cases can even trade against you.

Because each futures trading market runs on a single exchange, there is no individual with the power to affect your trading other than yourself.

Futures trading offers opportunities to gain exposure to assets that otherwise not available in the open market. But it’s important to understand the risks involved before taking up futures trading.

Leverage trading can be a very profitable strategy, but it can also be risky. Using leverage may bring a larger loss if the value of the underlying asset moves against you. Futures trading inherently involves leverage and care should be taken to mitigate risk.

The use of leverage also increases the risk of losing money if the market moves against you. If you use too much leverage, your investment may become worth less than your account funds.

There are also risks associated with being in a futures position for an extended period of time. If the market remains volatile, a trader may find themselves unable to exit their position at a profit. This could lead to a loss of all or more than your full account size.

In futures trading, all futures contracts have a predetermined expiration date. Even if you have established fixed prices, as the expiration date nears those prices can become much less attractive to others. At times, this condition can cause futures contracts to expire as worthless investments.

This doesn’t apply to day traders, but you need to make sure you load the right contracts to your trading platform.

Futures contracts have commissions based on a per contract basis. If you trade many contracts and do so often, these fees can stack up.

To combat this, you need to only trade one or two of the best trades per session. You will need to seek profit targets that account for commissions. Calculate a rough tick size value for the commission for your typical trade. Consider this when deciding your average tick target per trade.

Risks of Futures Trading in Australia

While futures trading offers attractive benefits, it’s just as important to understand the risks involved—especially when trading on margin.

Leverage cuts both ways. The ability to control a large contract with a relatively small outlay means profits are magnified, but so are losses. Even a small market move in the wrong direction can quickly erode your capital, potentially leading to larger losses than you invested. Liquidation mechanisms are in place with reputable ASIC-licensed brokers in Australia, shutting down trades before you dip into negative balance territory, but this doesn’t eliminate the risk of losing your entire margin.

Beyond leverage, futures markets demand ongoing attention. Prices can shift rapidly, sometimes overnight.
This round-the-clock volatility means there’s little room for set-and-forget investing. Successful futures traders typically dedicate significant time to market research and trade management—novices may find the learning curve steep and the pressure intense.

It’s also worth noting that trading without a well-devised strategy increases risk substantially.

Understanding these inherent risks—and how to manage them—is essential before diving into the world of futures contracts.

Futures trading in Australia can be a great way to make money if you have a solid and consistent strategy. A strategy containing risk management techniques.

The futures trading markets offer unique flexibility to day trading in Australia. Living in Australia provides some challenges when trying to access live events in the Northern hemisphere. We’re in a vastly different time zone to the majority of the markets, particularly the US.

If someone in Sydney, for example, wants to day trade stocks on the S&P500/Nasdaq, they’ll be up around midnight doing so. The advantage of trading futures in Australia is you can trade the stock index itself during any major session. This means you can trade the Asian, European, and US sessions.

If you can only trade in the early morning, you could trade the U.S close. If you can only trade the afternoon, you could try the European open. There is a lot more option for what time of day you can trade futures in Australia compared to stocks/options.

There are a few tools and services that you will need to access the Futures markets and place trades. Here is what you will need in order to trade futures:

A trading computer setup, either laptop or computer. You need to have a laptop or computer that is capable of running trading software. That will allow you to connect to the market and place trades. You won’t need a top-of-the-line machine; however, it should be robust enough to not lag or crash at the wrong time.

Many of our members choose to use a laptop as it provides mobility and flexibility for where they can trade. Others prefer to set up a desktop computer in a designated location (a trading den, if you will.)

A reliable internet connection Because the live markets can move quickly it is important to execute your trades quickly. It’s also important to have a reliable connection that won’t drop out and leave you stuck in a trade until you’re back online.

Broadband or cable internet are the most preferred connections for trading.

A Trading platform to connect to a market and execute trades you will need a special software called a trading platform. Trading platforms provide you the charts and drawing tools to help identify trades, and the functionality to place trades.

Our favourite trading platform is NinjaTrader and it is the platform that we and our members use for indices trading.

A live connection and data feed You need a live connection to a market so that a trading platform can make the request to execute a trade. The data feed will provide information about price, and allow the platform to build charts.

The best way to learn to trade futures depends on how you best learn in general. But there are some guidelines that you can follow.

1. Has a consistently profitable strategy Most often, when learning how to trade, the goal is to be profitable. You need to follow an educator who is able to be profitable, and consistently so.

2. Has strong risk management techniques. Risk management is a huge part of trading. No trader is right all the time, it’s not possible, so you need to know what to do when you’re wrong.

3. Is accredited by a governing financial body Anyone can sell an online course. An ASIC regulated educator must work in the best interests of the student. Anyone who is not regulated by ASIC (or relevant body) has little repercussion to wrong-doing.

4. Has students who can also perform well in trading. The educator can be the best trader in the world, but if they can’t pass that skill on, it doesn’t matter. The trading strategy and techniques should be as transferrable to students as possible.

Learning from day trading books is a good method if you are someone who learns best by reading. You can find many quality books on the subject. The downside to learning from a book is that there is no educator to provide support. There’s no-one to answer questions about something you didn’t understand.

There isn’t anything wrong with learning from online sources, per se, but be careful. There are no requirements to posting something on the internet, anyone can do it. If you choose to learn how to trade from online sources, make sure they are reliable.

Ensure you aren’t learning from too many sources; different strategies don’t always work together. Information is often provided out of context with little support provided.

It is so important to invest in your education, with your time, money, and effort. While it’s possible to teach yourself futures trading, you’ll find your learning unstructured, and unsupported. You may end up with a Frankenstein’s Monster of different techniques and strategy.

Day trading academies may offer a day trading mentoring program or form of coaching. This is a good way to get help while you’re still learning how to trade futures.

It’s best to learn futures trading with an educator / take a Day Trading Academy course that has a solid track record. You should find someone who provides a high level of support and guidance. There are many share trading courses online, choose a program that you feel confident that you could learn.

Practice is important when learning how to trade. You need to practise on a simulated account, trading fictional money. This allows you to only risk your own money when you’re ready to open a live trading account.

Live day trading rooms are a good place to do this practise. You will be able to follow a professional trader and ask questions about the strategy. Watching someone perform a task is often a good way to learn.

Steps to Becoming a Futures Trader in Australia

If you’re keen to start your journey as a futures trader in Australia, there’s a clear path to get you into the action—without taking any unnecessary leaps in the dark. Here’s how to step in with confidence:

1. Pick Your Market

Start by narrowing your focus to the futures markets that truly interest you. Whether it’s equity indices, energy, or agricultural commodities (think E-mini S&P 500, WTI Crude Oil, or Soybeans), choose markets that offer enough liquidity for smooth trade execution and tighter spreads. If you already have experience in a certain sector, that’s a great place to begin—familiarity can be a huge advantage in the fast-paced world of futures.

2. Open a Brokerage Account

You’ll need a trading account with a brokerage that provides access to futures products. Look for platforms that allow you to tap into both domestic and global futures exchanges. Popular options among Aussie traders include NinjaTrader, and Interactive Brokers, both of which offer broad international market access and solid trading tools. Just make sure they’re licensed for Australian clients.

Beyond the basic brokerage fees, pay close attention to margin requirements—these determine how much capital you’ll need to open and maintain positions.

3. Build a Strategy and Have an Exit Plan

A good strategy sets apart the casual dabblers from consistent traders. Decide whether you’ll be a directional trader (betting on markets going up or down), prefer spread trading, or want to use futures primarily to hedge other investments. In all cases, plan your entries, establish profit targets, and always map out your exit, so you’re not caught flat-footed if the market turns.

Tip: Don’t be afraid to test your strategies through a simulated (or demo) account before putting real money on the line. Even seasoned pros use these practice runs to work out the kinks.

4. Place and Manage Your Trades

Execute your trades with clear rules—know whether you’re taking a long or short position, define your position size, and, importantly, set stop-losses and profit targets. These risk management tools are your seatbelts in volatile markets.

5. Stay Alert and Adjust as Needed

Monitor your open positions closely. Markets can change direction quickly, so be prepared to exit if things don’t go your way. If you ever receive a margin call, treat it as a red flag rather than a challenge. Sometimes, the best move is to step out, reassess, and protect your capital.

Trading futures isn’t just about making bold moves; it’s about making smart, calculated decisions at every stage.

Yes, trading futures can be profitable. But you need to learn a trading strategy that allows you to find high-probability trades. You need to partner that with a strong risk management strategy.

You will need to learn trading psychology skills that allow you to be patient and avoid mistakes. Trading without emotion is very difficult to do, but as traders we need to limit emotion as much as possible.

To have a chance of being profitable, you’ll need 3 major things: A strategy that helps you find good trades A method for managing risk The right mindset

These 3 things combined provide you with the “trader’s edge”.

Why Trade Futures?

There are two primary reasons why traders are drawn to futures markets: speculation and hedging.

Speculation

Speculators—whether professional or individual traders—are often attracted to futures because of:

• Potential for faster profits: Futures markets move quickly, offering frequent opportunities on day-to-day price swings.
• Flexibility to go long or short: You can profit from both rising and falling markets, across a wide range of assets, including commodities, indices, and currencies.
• Extended trading hours: Futures exchanges operate nearly 24/7, which means you aren’t limited to standard stock market hours.
• Leverage: Futures allow you to control larger positions with less upfront capital, increasing both profit potential and risk.

Keep in mind, though, that with greater reward comes greater risk. Futures prices can be heavily influenced by unpredictable events—from natural disasters to global politics. For example, oil prices have been tossed around in recent years by events like the war in Ukraine and the COVID-19 pandemic. Speculators need to be prepared for volatility and manage their risk accordingly.

Hedging

Futures aren’t just for speculators—they’re also valuable tools for hedging risk. By taking an opposing position in the futures market, traders and investors can offset potential losses in their core holdings. Some classic examples:

• A farmer might sell wheat futures to lock in today’s price, protecting against a drop before harvest.
• A food processor might buy wheat futures to guard against rising input costs, ensuring stable pricing for production.

In Australia, it’s common for both individuals and businesses to use ASX 200 index futures or commodity futures to hedge against sudden market moves. This can help protect portfolios or business operations from unexpected shocks.

Futures trading offers flexibility, accessibility, and unique strategies for those looking to speculate or manage risk. However, as with any trading approach, it’s crucial to understand both the opportunities and the risks before diving in.