Markman Capital Insight

How to Buy and Short Futures

To buy and sell futures efficiently with the Gemini services, you will first need to open and fund an account at a futures brokerage. There are many good ones, including RJ O'Brien, AMP Futures and Think or Swim. We like Interactive Brokers because its no-nonsense software platform is easy to use, customer service is good and commissions’ charges are among the lowest.

Gemini orders will consist of a futures contract name, symbol, and month of expiration, buy or short instruction, recommended entry limit price a recommended entry time. Very often the system will also supply a target and stop.

In this trade-entry "ticket,” you can see on the top line that the order is for ES December 2014 Futures. (ES is the symbol for the S&P 500 E-minis. The index futures expire in either December, March, June or October.)

In this case, the last price was 1884.00 and the bid/ask is 1884.00 x 1884.25. Type the number of contracts you wish to purchase in the Quantity field, choose Limit as your Order type, and then enter the recommended price, such as 1880.75, in the Limit field.

Very often the Gemini systems recommend buying "limit at close (4:14-4:15 pm ET). This means the system only wants members to buy the contract if it is at or below a certain price in the last one minute of trading. To enter the start time of the order, click the little calendar button to the right of the Start Time field. Up pops a calendar and a clock. In the time field, type in the local time equivalent of 4:14 pm ET. In the case of the west coast, the time to enter is 1:14:00. Set the Time in Force as "Day," which means the order will expire at the close at 4:15 pm ET if not filled. Then click Create Order, review and Transmit.

Now if the ask hits 1880.75 at any time in the specified 60 second window, a single contract will be purchased at that price or lower. If not, the system will beep and produce a message that the order was canceled.