Understand the structural differences between stocks and futures with our easy-to-follow guide. Here, we cover leverage, expiration, taxes and how your account settles each day. Read on for examples and a side-by-side comparison of futures vs. stocks.
Stocks are an asset type that represent ownership in a company. Futures are derivative contracts – the value of which is tied to an underlying asset or benchmark, such as stocks, commodities, crypto, etc. So, when comparing futures vs. stocks, the more useful distinction is between trading futures contracts and buying or selling shares of stock outright.
When you buy stock, you buy a small share of a company. Stocks generally don’t have a fixed expiration date, so you can hold them for as long as the company exists and the shares remain available. Only events like bankruptcy, mergers or delisting can affect or end that holding.
A futures contract works differently. Entering one doesn’t give you ownership of the underlying asset. Instead, it creates a legally binding agreement to buy or sell a specified quantity of an underlying asset (sometimes stock) at an agreed price on a set date (expiration). Then, the position generally needs to be closed, rolled into a later contract or settled according to the terms of the contract.
Other than the main distinction – owning shares vs. trading a time-limited derivative contract – differences include leverage, expiration, settlement, trading hours and the range of markets available.
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When you buy ‘common stock’, you become a shareholder in the company. That may come with certain benefits, including voting rights and eligibility for dividends (if a company pays them). These features normally vary by company and share class, so it's worth checking the specifics before assuming your rights.
To buy stocks outright, you have to pay the full value of the shares upfront. After that, any potential profit or loss will be the difference between the price at which you bought them and the price at which you sell them. Remember, you can hold them for as long as you want, provided they remain outstanding. There’s no maturity date requiring you to close your position.
When buying stock, there’s a short settlement period. Settlement is simply the process of completing the transaction. The buyer receives the shares and the seller receives the payment. For most US stock trades, settlement takes place one business day after the trade date, known as T+1.
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Futures contracts work according to a set of standardized terms, covering the agreement to buy or sell a specific quantity of an asset at a predetermined price on a specified future date. Because they’re standardized and the contracts trade on regulated exchanges, buyers and sellers know exactly what they're agreeing to.
The key contrast with stocks is expiration. You can't simply hold a standard futures contract forever and wait things out. The exception to this is perpetual futures.
So, what are your options before or at expiration? A futures position can typically be closed out through an offsetting trade, rolled into a later contract month, physically delivered or cash-settled, depending on the contract's specifications. Not every contract is deliverable, so the specifics depend on what you're trading.
Margin posted for a futures position acts as a deposit that helps ensure contract obligations are met. It’s not a partial payment toward ownership of the underlying asset. Exchanges and brokers set the exact margin requirements.
Then there's the daily accounting. Open futures positions are ‘marked to market’ at the end of each trading day, so that unrealized gains are credited and unrealized losses are debited to the trader's margin account.
Read more about stock futures trading
Stocks | Futures | |
Ownership | Represents equity in a company | Creates an obligation to trade; no ownership of the underlying at entry |
Contract expiration | No fixed expiration | Defined expiration; must be closed, rolled or settled |
Capital and leverage | Bought outright | Margin as a deposit; leverage may magnify gains and losses |
NYSE core session 9:30 A.M. to 4:00 P.M. ET, weekdays | Many contracts trade nearly around the clock, five days a week | |
Short selling | Not possible when buying stocks outright | No borrowing of the underlying is required to go short; you enter directly into an obligation to sell |
Settlement | Most equities settle T+1 | Marked to market daily; multiple settlement paths at expiration |
Tax treatment | Standard capital gains rules | Many qualify under Section 1256 (60/40 split) |
Regulatory oversight | FINRA within the SEC framework | CFTC and NFA |
The simplest way to separate options from futures is rights vs. obligations. An options contract gives its holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date. You can walk away and let it expire if the trade doesn't work in your favor.
Futures don't offer that flexibility. A futures contract obligates both the buyer and the seller to transact according to the contract's terms, unless the position is closed out or rolled before expiration. Most traders close or roll before final settlement to avoid physical delivery of the underlying.
The payoff is different, too. Options have an uneven payoff, which means gains and losses don’t move one-for-one with the underlying price. Futures have a more direct payoff, with gains and losses generally moving in proportion to changes in the underlying price.
Stocks and futures are regulated differently in the United States. Stock markets and brokers generally fall under the oversight of the Securities and Exchange Commission (SEC) and FINRA. Futures are regulated mainly by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA).
The tax treatment can also be different. Many regulated futures contracts qualify for special treatment under Section 1256 of the US tax code. For these contracts, gains and losses are generally treated as 60% long-term and 40% short-term capital gains or losses, regardless of how long the trade was open. They’re also generally valued at their year-end market price for tax purposes, even if the position hasn’t been closed.
Stocks usually follow the standard capital gains rules. If you sell a stock after holding it for more than one year, gains are treated as long-term capital gains. If you held it for one year or less, gains are treated as short-term capital gains.
Always consult with a qualified tax professional.
So far, we've compared futures trading with buying stocks outright as investments. Day trading is a little different. Instead of buying shares to hold, a day trader typically opens and closes positions within the same trading day in an attempt to profit from short-term price movements.
Stock day trading and futures day trading follow different account and margin rules.
For US stock traders using margin accounts, FINRA historically applied the Pattern Day Trader (PDT) rule, which required certain frequent day traders to keep at least $25,000 in their accounts. That framework changed in 2026, when FINRA introduced new intraday margin rules to replace the previous system. The new rules are being phased in through October 2027.
Futures accounts aren’t subject to FINRA's stock day-trading rules. Instead, futures brokers and exchanges set margin requirements that determine how much money you need in your account to open and maintain a position. These requirements can also differ for positions held during the day vs. overnight.
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What is the main difference between futures and stocks?
Buying a stock represents equity in a company and ownership doesn’t have a fixed expiration date. A futures contract is a standardized, legally binding agreement to buy or sell an asset at a predetermined price on a specified future date.
Is futures trading riskier than stock trading?
Futures trading involves leverage, meaning small price movements may magnify both gains and losses relative to the margin posted, which regulators identify as a significant risk factor. If equity falls below maintenance margin, a broker may issue a margin call and liquidate positions.
Are futures subject to the Pattern Day Trader (PDT) rule?
No, futures accounts are regulated under CFTC and NFA rules and fall outside this framework.
How are futures taxed compared to stocks in the U.S.?
Gains and losses on qualifying Section 1256 contracts are treated as 60% long-term and 40% short-term, regardless of the holding period. Stocks follow standard rules: more than one year for long-term treatment and one year or less for short-term treatment. Always consult a tax professional for your situation.
Can you hold a futures contract indefinitely like a stock?
No, a futures contract has a defined expiration date. Before or at expiration, a position can typically be closed out through an offsetting trade, rolled into a later contract month, physically delivered or cash-settled,
Do you own the underlying asset when buying a futures contract?
Not at entry, no. Entering into a futures contract creates an obligation to buy or sell the underlying asset at a future date. Ownership, if any, comes only through physical delivery at settlement.
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Foris DAX Inc. (“Crypto.com”) introduces customers to Foris DAX FCM, LLC, a CFTC-registered Futures Commission Merchant, for the purpose of opening accounts to trade perpetual futures contracts (“Perpetual Futures”) offered by Crypto.com | Derivatives North America (CDNA), a CFTC-regulated exchange. Crypto.com is a guaranteed introducing broker of Foris DAX FCM, LLC. All customer accounts related to Perpetual Futures are carried by and held at Foris DAX FCM, LLC.
Trading Perpetual Futures on CDNA involves significant risk, including the risk of loss in excess of your initial margin deposit due to the use of leverage, and may not be appropriate for all. Perpetual Futures do not have an expiration date and positions may be held indefinitely, which can result in ongoing funding rate charges and amplified losses. You should carefully consider whether trading Perpetual Futures is appropriate for you in light of your investment experience, financial resources, and risk tolerance. Any trading decisions you make are solely your responsibility and at your own risk.
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