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Interactive Brokers vs. Fidelity vs. Paradigm Futures

People trade futures, options, and stocks for various purposes. They’re great ways to ensure access to certain assets at a given time. 

Different trading platforms let you trade different asset classes. Let’s compare some of the biggest trading platforms out there — Interactive Brokers, Fidelity, and Paradigm Futures — and walk through each platform’s strengths and weaknesses to ensure you find the best one for your trading needs. 

Before we get further into the comparison, it’s important to establish certain things.

What are Futures? 

When you trade futures, you are legally tying yourself to the possibility of having to receive the underlying asset at a certain point. It’s a legally binding contract wherein you agree to receive a number of units of a specific commodity at a certain time.

To trade futures, you go through a futures exchange, where you can open positions and create positions with future contracts. As they’re standardized, speculators and hedgers can take positions out on these easily tradable asset classes. By doing so, ownership is moved from one person to another, as are the responsibilities. 

Various different parties trade futures, including:

  • Speculators
  • Storage facilities
  • End users
  • Producers

Why Trade Futures?

Storage facilities, end users, and commodity producers are all at risk of price movements in the market. Trading futures is a way for them to mitigate that risk. 

Futures benefit various users, like the farmer. Without a futures contract, he would have to incur all the expenses related to farming without any of the revenue. 

Corn is harvested in October, but the farmer has to start the process a lot earlier to achieve that. Inputs must be purchased in the winter and spring, many months before they can harvest the crop. All these expenses accumulate. 

With the use of futures contracts, the farmer can sell an obligation to deliver on the contract before the corn is even planted, giving him the cash flow to be able to buy the necessary input for the operation. By using a futures contract, the farmer is compensated a fair price for their product. 

Speculators are also common in futures trading, as they see what they believe to be opportunities in asset classes when something is either overvalued or undervalued. They’re an important part of the futures market. 

While they temporarily own the contract to have a commodity delivered, they never intend to hold the contract when the good is delivered. Speculators can make money when prices are going either up or down, assuming they get the direction right. They’re an important part of providing liquidity. 

Futures are not the only asset classes that can be traded, but they’re big ones. There are various platforms where you can trade these asset classes, and we want you to make a better decision when you start trading.

Interactive Brokers vs. Fidelity vs. Paradigm Futures: An overview 

Interactive BrokersParadigm FuturesFidelity
Rate✅✅✅✅✅✅✅
Accessibility✅✅✅✅✅✅✅✅✅
Information✅✅✅
Equity Security✅✅✅✅✅✅✅
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Different trading platforms Interactive Brokers, Fidelity, & Paradigm Futures have important differences related to your trading experience that set them apart, including: 

  • Rates
  • Accessibility
  • Access to information
  • Equity security

All three companies offer trading platforms for retail investors where securities are bought and sold. The different companies have various tools available, with some unique to each platform, to help you analyze portfolios and ensure you create the best investment strategy for your objective.

Interactive Brokers

Scores:

  • Rates: 3
  • Accessibility: 3
  • Information: 1
  • Equity security: 2

Interactive Brokers is a discount broker listed on the stock exchange. While they’re able to give you a lot of options for little money, that’s all you should expect. They’re the cheapest broker out there but also the one with the least support. 

Low-volume traders may find Interactive Brokers appealing, but  the quality and research they provide is very limited.

Paradigm Futures

Scores:

  • Rates: 2
  • Accessibility: 3
  • Information: 3
  • Equity security: 3

Paradigm Futures and its platform is a partnership between futures trading company RJO and broker service company Paradigm Futures. While the fees may originally be higher, you get what you pay for with superior service.

Fidelity

Scores: 

  • Rate: 2
  • Accessibility: 3
  • Information: 2
  • Equity security: 2

Fidelity is a big company that offers various services, like banking and retirement planning. The advantage to that is that you can put your money in the Fidelity system before you’re even investing.

Unlike Paradigm Futures and Interactive Brokers, which are mainly brokerage companies, Fidelity offers a suite of products. Some of the investment products offered by Fidelity include: 

  • Mutual funds
  • Exchange-traded funds (ETFs)

As pure trading platforms, Interactive Brokers and Paradigm Futures do not offer their own investment products. However, it’s important to note that Fidelity does not offer futures trading.

If that’s the asset class you hope to trade, you will want to consider either Paradigm Futures or Interactive Brokers.

What to Look for When Trading Futures

Choosing the right trading platform is important. Let’s walk through the things to look for when choosing who to invest with for trading futures. 

Rates

Comparing rates across different trading platforms may seem easy at first. However, it’s important to know the limitations when doing so. Some platforms will seemingly have very low rates, which may be the right choice for some. 

However, these discounted rates are usually a low-touch, low-insight strategy to get you hooked. Some trading platforms, on the other hand, charge higher rates but deliver significantly higher levels of support and user experience. These higher-rate platforms usually provide broker-assisted platforms in return. 

You get what you pay for. It’s no different from choosing a restaurant. Some people choose to spend more because they wish to have a nicer experience, interacting with highly-professional staff. 

While it may be tempting to go for the lower rates, it’s not always how you get the best service. Interactive Brokers is one of the companies that prides itself on starting with a $0 commission structure.

It’s great for businesses to start off with, but it doesn’t mean everything is free. While advertising $0 commission, they have desk fees, risk fees, and other hidden fees that add up as you’re trading. 

Fidelity does a lot of the same stuff as Interactive Brokers. The initial deep discount seems like an appealing way to trade until you need something additional. 

Paradigm Futures offers more transparent trading at a standard $65/round for futures and options. It’s a company with a vested interest in you doing well. With brokers on staff, they can help you no matter what. They also offer different structures for self-directed accounts and accounts with higher trading volumes.

Accessibility

Each of these trading platforms let you access the markets straight from your preferred device, whether it’s Fidelity, Interactive Brokers, or Paradigm Futures. All it takes is for you to be connected to the internet. 

This means you have 24-hour access, which gives you the ability to make the trade when you want. No additional charges are incurred when trades happen between 7:30 am and 7:00 pm central standard. With Paradigm Futures, night desk fees apply outside those hours and are $3 per filled contract. The structures at Fidelity and Interactive Brokers are similar.

Information

Through Paradigm Futures, you’re able to access unprecedented market insights provided by RJ O’Brien. Their network is the result of being the oldest and largest private futures commission merchant (FCM) in the US, ensuring you get access to the data you need. 

Hedges and speculators appreciate being able to use the various charts they offer. You also can conveniently pull and analyze government reports, giving you the most up-to-date information and access. 

Access to information is much more limited when it comes to Fidelity and Interactive Brokers. Their mantra is keeping costs lower. 

Without access to information, you’ll be making trading decisions in the blind. Physical markets shift, and you need to be able to make the best decisions.

Equity security

To start trading, you often put substantial amounts of money in the hands of companies you may not know much about. Newer companies come into the space and are being paraded as disrupters. 

However, is the case of FTX really a case of disruption or something more sketchy? 

When times are uncertain, you want to know that you can pull out the money when you need to. As the oldest platform offering futures trading, backed with access to information provided by RJO, joining a broker partnership between Paradigm Futures and RJO is the right way to go.

Choose the Best Futures Trading Platform

After comparing Interactive Brokers, Fidelity, & Paradigm Futures, we believe Paradigm Futures offers the absolute best trading platform to help you find success in trading futures. It offers outstanding support and services like broker-assisted futures trading

Low-volume traders may find Interactive Brokers and Fidelity appealing. Still, when you start trading higher volumes, it becomes clear that Paradigm Futures is the best trading platform.

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