Why We Trade Futures at Santiago Trading
At Santiago Trading, we’re very intentional about the products we trade. We focus on futures because they give us three things we can’t ignore: clean shorting, transparent pricing, and superior capital efficiency—without diluting our edge across a thousand random tickers.
Let’s walk through what that means in our world.
1. Shorting That Actually Works
If we want to press a downside thesis or protect open risk, we can’t be negotiating with our tools.
With individual stocks, “shorting” comes with baggage:
- Locate requirements
- Hard-to-borrow names
- Extra fees
- Uptick rules and routing nonsense
That frictions your timing, your sizing, and your confidence.
With futures, shorting is built into the structure:
- Going short is as simple as clicking Sell.
- No borrow. No locate. No inventory constraints.
- The mechanics of going long or short are symmetrical.
How we use it at Santiago:
- Tactical bearish plays on indices without hunting for single-name borrow.
- Portfolio hedges using ES, NQ, RTY, etc. to offset equity or swing exposure in real time.
- Event risk management: if macro risk spikes, we can reduce net exposure in seconds.
When downside expression is this clean, we can focus on trade quality, not market plumbing.
2. Transparent, Centralized Pricing
Good decisions require clean data and honest execution. Stock trading is fragmented: lit exchanges, dark pools, internalizers, payment-for-order-flow—layers between intent and fill. Futures simplify that.
Most major futures contracts trade on a centralized exchange with a single primary order book. That gives us:
- Unified liquidity: Everyone’s competing in the same pit. Depth-of-market means something.
- Reliable spreads: Especially in contracts like ES, NQ, CL, GC—where institutional flow lives.
- Cleaner backtests → live alignment: One venue, one rule set, consistent ticks. Less structural noise between research and execution.
Why that matters for our process:
- Our levels, zones, and opening range logic are based on robust, centralized order flow.
- Our automation and discretionary reads see the real market, not a sliced-up version of it.
- When we evaluate slippage, liquidity, and risk, we’re doing it in a market designed for professional flow.
Put simply: we prefer to compete where the playing field is clear.
3. Capital Efficiency & Leverage (Used Like Adults)
Futures are capital-efficient by design. That’s a feature—if you treat it with respect. Instead of tying up full notional value (like buying $100,000 in stock), we post a performance bond (margin) that covers potential losses, while controlling the full contract exposure.
For Santiago Trading, that means:
- More flexibility: We can run multiple strategies (intraday index, swings, hedges) without overfunding each silo.
- No Pattern Day Trader rule: Active traders aren’t handcuffed by arbitrary equity minimums to execute a professional playbook.
- Tighter risk frameworks: We define risk in terms of ticks, volatility, and account percentage—not vibes.
But we’re blunt about it:
The same leverage that makes futures efficient will punish sloppy sizing, loose stops, and emotional decision-making.
Our approach:
- Pre-defined max risk per trade / per day
- Structured playbooks and levels (not impulse clicks)
- Respect for volatility, contract specs, and margin dynamics
Capital efficiency is an edge only if you survive long enough to use it.
Why This Fits Our Philosophy
At Santiago Trading, we care about:
- Clean execution mechanics
- Structural fairness where possible
- Tools that scale from one contract to institutional-level sizing
- Aligning discretion, data, and risk in the same framework
Futures give us:
- Straightforward two-sided trading (shorting done right)
- Transparent markets we can read, model, and trust
- Capital-efficient exposure that lets us operate like a business, not a hobby
That’s why we trade futures.