Day-trading the Futures contract vs the underlying equity in the cash market?

Hello Traders,

As a day-trader what are the practical benefits of choosing to trade the Futures contract instead of the underlying equity in the cash market ?

Please write an article.

  1. Lesser impact cost if your order size is bigger. Since futures trade in lot sizes, you can buy a lot at particular price, you might end up losing on impact if placing market orders on equity. Limit orders might take time to fill.

  2. Ability to stay short until the close of day (unlike in equity where you have to buy back before 3.20 pm).

  3. Lesser STT while trading futures (0.01% of sell side) vs equity trading (0.025% of sell side).

  4. You can use margin from pledged stocks to trade futures, but margin can’t be used to trade intraday stocks.

All the above considering day trading only. Other than the fact that while intraday trading equity, you can trade any quantity you want vs a fixed lot in futures, there is no other advantage equity trading has compared to futures day trading.


Thanks for the timely response which was very helpful.
Profitable day traders , which boat are they on ? Waiting for a follow up.

Both boats :slight_smile: