Futures Trading

Futures trading is one of the most popular and common investments in a self directed IRA. Typically, the IRA owner has expertise in market trading. Never is this more true than with futures and forex traders. Investors need knowledge and understanding of the markets and how they trade. The majority of futures trading in an IRA is done in a managed account where a fund manager handles all trades.

What is futures trading? Futures trading is a contractual agreement between a buyer and seller on a specific price for a commodity such as gold, oil, or orange juice at a specified date in the future. The buyer of a futures contract is taking on the obligation to buy and receive the underlying asset when the futures contract expires. For this reason, futures trading, especially in IRAs, is often speculative, and the contract sells before expiration. Still, it can also be used for hedging against the market or industry. You can trade futures on stock exchanges by buying contracts in the S&P 500, the DOW Jones, and Bitcoin. Unlike the stock market, futures trading is nearly 24/7.

Retirees Riding Bicycles on Path

Types of Futures

  • Self Directed Trading
    • Trade futures with a self directed account (for the experienced trader).
  • Managed Accounts
    • Let a professional money manager (Commodity Trading Advisor) do the trading for you.
  • Automated Accounts
    • Automated trading programs able to execute orders at high-speeds following trading algorithms.

Benefits of Investing in Futures With Your IRA

  • Building for Retirement
    • Most Americans do not want to rely on Social Security.
  • Earnings Growth
    • The gains within self directed IRAs and other plans accrue on a tax-free or tax-deferred basis to benefit you when you retire.
  • Tax Deductions Can Be Taken on Contributions to Your Self Directed IRA
    • While this does not apply to Roth IRAs—most contributions to other retirement plans and self directed IRAs are eligible deductions on your income taxes.
  • Roth Self Directed IRAs Are One of the Most Beneficial Retirement Plans Available
    • All contributions are made after tax, but the earnings grow on a tax-free basis provided that certain requirements are met.

New: Bitcoin ETF

A new Bitcoin ETF by ProShares tracks the futures price of bitcoin under the ticker symbol “BITO” on the NYSE. This means you can now gain exposure to bitcoin through a brokerage account. BITO can be bought and sold like a stock and eliminates the need for a crypto wallet and an account at a cryptocurrency exchange if you want exposure to Bitcoin only. Currently, Midland clients can set up a Midland TD Ameritrade or Midland TradeStation brokerage account.

Futures Trading in IRA Process & Timeline

    - 1 Business Day
    Open a Midland Account

    Midland IRA’s application can be completed entirely online. You may also contact us and we will send you the paperwork.

    - 1-2 Weeks
    Fund the Account

    Transfer funds from an existing IRA or rollover funds from a former employer plan. If you are eligible, you can also make an annual contribution to your IRA.

    - 2-5 Business Days
    Make the Investment - Forex

    Complete FCM or introducing broker’s paperwork. Title to your Midland IRA account. Most of the time, they will send Midland a copy once reviewed and approved.

Midland’s Role Once the Futures Trading Account is Open

All trading will be done with the FCM. Midland is responsible for all cash flow record-keeping related to the IRA-owned trading account. Whenever you are looking to add additional funds or remove funds from the futures account, it will need to flow through your Midland account. Midland handles the ongoing tax reporting for contributions & distributions of assets held in your Midland retirement account.

Important to Note: Trading accounts must be held in title by the investor account: Midland Trust Company as Custodian FBO Client Name Client Account Number.

Futures Trading FAQs

Am I allowed to trade with margin?

Can I personally guarantee funds?

I already have a trading account with this futures company. Do I need a new one?

I already sent paperwork to the trading company to open an account. Do I still need to send a copy to Midland IRA?

What happens after my trading account is open?

I want to remove funds from my futures trading account. Can I do this with them directly?

I want to add funds from my trading account. Can I do this with them directly?