Stocks, futures, forex, options or crypto: choosing a market
Every market can be day traded, but they behave differently and come with different costs and rules. A quick tour:
- Stocks: thousands to choose from and easy to understand, but subject to the pattern day trader rule in US margin accounts, and many move only during regular hours.
- Futures: contracts on indexes, commodities, rates and currencies, traded on a central exchange nearly 24 hours a day on weekdays. There's no pattern day trader rule, micro contracts allow small size, and they're what most prop firms offer.
- Forex: currency pairs, open around the clock, usually traded through a dealer rather than a central exchange.
- Options: contracts with an expiry whose value changes with price, time and volatility. That makes them more complex to learn first.
- Crypto: open 24/7 and very volatile, with rules and protections that vary a lot by platform and country.
Futures basics
Futures prices move in ticks (the smallest price step), and each contract has a fixed dollar value per point. Knowing these is essential, because they turn a price move into dollars:
| Symbol | Contract | Value per point | Tick (value) |
|---|---|---|---|
| ES | E-mini S&P 500 | $50 per point | 0.25 ($12.50) |
| MES | Micro E-mini S&P 500 | $5 per point | 0.25 ($1.25) |
| NQ | E-mini Nasdaq-100 | $20 per point | 0.25 ($5.00) |
| MNQ | Micro E-mini Nasdaq-100 | $2 per point | 0.25 ($0.50) |
| CL | Crude Oil | $1,000 per point | 0.01 ($10.00) |
| MCL | Micro Crude Oil | $100 per point | 0.01 ($1.00) |
| GC | Gold | $100 per point | 0.1 ($10.00) |
| MGC | Micro Gold | $10 per point | 0.1 ($1.00) |
So if the E-mini S&P 500 (ES) moves 4 points, that's $200 per contract, and the same move on the micro (MES) is $20. Micros let you trade the same market at a tenth of the size, which is why many beginners start there.
How to choose
Pick one market and learn it well rather than jumping between several. Useful questions: when is it most active, and does that fit your schedule? How much does one tick cost relative to your account? Is it what you'd trade at a prop firm, if that's your route?