A stock represents ownership in a company. A futures contract is an agreement to buy or sell an asset at a set price on a future date, and you don’t own anything underlying it unless the contract settles by delivery. That structural difference drives almost everything else that separates the two: leverage, trading hours, expiration, and how each gets taxed.
The core differences at a glance
| Stocks | Futures | |
|---|---|---|
| What you’re trading | Ownership in a company | A contract on an underlying asset (index, commodity, currency, rate) |
| Leverage | Typically 2:1 under Reg T margin, or none if paying cash | Built into the contract structure; margin is a small fraction of notional value, set by the exchange |
| Trading hours | Primarily 9:30 a.m. to 4 p.m. ET, with limited pre/post-market | Nearly 24 hours a day, Sunday evening through Friday afternoon, with a short daily maintenance break |
| Expiration | None. Shares can be held indefinitely | Contracts expire and must be rolled to maintain a position |
| Settlement | You hold the shares | Cash-settled or physically delivered, depending on the contract |
| Day-trading restrictions | Historically the Pattern Day Trader rule; now a real-time intraday margin framework (see our breakdown) | No day-trading rule at all, this restriction has never applied to futures |
| Tax treatment | Ordinary short-term or long-term capital gains rates, based on how long you held the position | Section 1256 contracts get a fixed 60% long-term / 40% short-term split, regardless of how long you held them |
Leverage and margin work differently
Stock margin is a regulatory borrowing limit. Futures margin is a performance bond set by the exchange, sized to cover a contract’s typical price movement, not a percentage of the position’s full value. That’s why a futures contract with hundreds of thousands of dollars in notional exposure might only require a few thousand dollars in margin. It’s not a loophole, it’s a completely different mechanism, and it’s also why futures carry meaningfully more risk per dollar committed than an equivalent stock position.
Trading hours
Stocks trade during exchange hours, with some brokers offering limited extended sessions. Futures trade on Globex nearly around the clock, Sunday evening through Friday afternoon, pausing only for a short daily maintenance window. This is a real practical difference for anyone wanting to react to news outside standard market hours.
Day-trading rules don’t apply to futures at all
This is one of the most common points of confusion for traders coming from stocks. The Pattern Day Trader rule, and the intraday margin framework that replaced it in June 2026, apply only to equity and options margin accounts under FINRA Rule 4210. Futures margin is governed separately by the exchanges and the CFTC. There has never been a day-trade count or a minimum equity threshold for futures accounts. For the full picture of what changed on the equities side, see our breakdown of the new intraday margin rules.
Tax treatment
Stocks are taxed on actual holding period: short-term gains at ordinary income rates, long-term gains at the lower capital gains rate, once you’ve held a position more than a year. Most futures contracts fall under Section 1256 of the tax code, which applies a fixed 60% long-term and 40% short-term split to every position, regardless of how long it was held. This can meaningfully change the tax picture for active traders, and it’s worth discussing with a tax professional rather than assuming either treatment applies by default.
This page is for informational purposes only and is not trading, tax, legal, or financial advice. Trading futures and stocks both involve substantial risk, including the risk of loss. Consult a licensed professional before making decisions based on your specific situation. See our Legal Disclaimer for details.