Copper Futures Trading Basics

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Copper Futures Trading Basics

Copper futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of copper (eg. 25 tonnes) at a predetermined price on a future delivery date.

Copper Futures Exchanges

You can trade Copper futures at London Metal Exchange (LME) and New York Mercantile Exchange (NYMEX).

LME Copper ‘A’ Grade futures prices are quoted in dollars and cents per metric ton and are traded in lot sizes of 25 tonnes (55116 pounds).

NYMEX Copper futures are traded in units of 25000 pounds and contract prices are quoted in dollars and cents per pound.

Exchange & Product Name Symbol Contract Size Initial Margin
LME Copper ‘A’ Grade Futures
(Price Quotes)
CA 25 tonnes
(Full Contract Spec)
USD 15,000 (approx. 19%)
(Latest Margin Info)
NYMEX Copper Futures
(Price Quotes)
HG 25000 pounds
(Full Contract Spec)
USD 7,763 (approx. 21%)
(Latest Margin Info)

Copper Futures Trading Basics

Consumers and producers of copper can manage copper price risk by purchasing and selling copper futures. Copper producers can employ a short hedge to lock in a selling price for the copper they produce while businesses that require copper can utilize a long hedge to secure a purchase price for the commodity they need.

Copper futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable copper price movement. Speculators buy copper futures when they believe that copper prices will go up. Conversely, they will sell copper futures when they think that copper prices will fall.

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Copper Futures Trading Basics

This Blog provides futures market outlook for different commodities and futures trading markets, mostly stock index futures, as well as support and resistance levels for Crude Oil futures, Gold futures, Euro currency and others. At times the daily trading blog will include educational information about different aspects of commodity and futures trading.

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Posted By: Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog

Copper Futures Trading is one of the most popular vehicles in the industrial metals market. Copper is used in a wide variety of markets such as construction, plumbing, manufacturing and architecture. With such a wide array of usages, trading copper offers many opportunities for gain. More and more investors are looking to raw commodities as trading vehicles as they provide more liquidity and volatility within their respective markets. Trading raw commodities as futures contracts also allows for better price transparencies.

Copper is usually a great indicator of economic growth within a region. As the demand for copper rises, the more valuable the commodity becomes given its vital contributions to industrial and urban development. Worldwide copper consumption has been on the steady rise since 2020, with China being the world’s top copper consumer. Industrial copper producing companies use the futures market to hedge against losses and for price mitigation. Investors generally use the copper futures market to leverage their capital against price fluctuations to generate returns on their investments.

A copper futures contract represents 25,000 pounds of copper. Standard trading hours operate from Sunday through Friday beginning at 6:00 p.m. until 5:15 p.m. the following day Central Standard Time, allowing a 23 hour trading platform. The 45 minute break allows for the close out on the previous day’s results. Trading in copper futures requires paying close attention to market fluctuations and remaining active on developing markets. Because copper moves within the market at high volatility, neglecting a position for even a short period of the day can be very costly. Below are a few of the most popular exchanges copper futures trade on:

  • Commodity Exchange (COMEX): COMEX is a member of the Chicago Mercantile Exchange and specializes in a large amount of industrial metals. This exchange also provides another version of copper futures contracts that represent 12,500 pounds of copper. Prices are updated on a continual basis on this exchange during trading hours, giving real time quotes and market activity for traders to analyze and take favorable positions.
  • London Metal Exchange: This exchange provides a more global approach to the copper market for investors to play their hand abroad. This is important because the majority of copper consumption and movement occurs outside of the continental U.S. with Chile, Peru and China leading the market. Futures contracts on this exchange are the second most popular currently.
  • Multi-Commodity Exchange: This exchange offers both standard and mini futures contracts for investors. Standard contracts on the MCX occur in February, April, June, August and November. This India based exchange has contracts at 1 MT and 250 kilograms in a minis format.

A popular approach to trading copper futures is in the Online Trading Futures platform . Most brokerages tend to trade in stocks and stock options. However, there are a lot of brokerages that are now recognizing the popularity growing among traders to trade online. As a result, many offer online trading platforms for experienced traders who tend to want to make their own day to day trading decisions. Many brokerages offer simulated online trading modes to familiarize an investor with the market temperament without risking any financial assets. Simulated trades occur in real-time, with simulated money, offering and ideal learning experience for someone new to the copper futures market.

Remember, there is a certain amount of risk involved with any investment, therefore gains are not guaranteed. The way to trade the copper commodity is to become familiar with copper market participants and consumers, as well as to pay close attention to market trends. Playing the market closely while monitoring economic trends within regions that consume copper at a high rate puts an investor in the right place to take bold positions on contracts. Keeping up with news related to construction industries will also keep an investor well informed about the daily direction of the market, which is recommended for evaluating price directions. Consulting qualified futures brokers who specialize in industrial metals and who can read the direction of the market will greatly aid in sound decision making.

For more information about Copper Futures Trading and market activity visit https://www.cannontrading.com.

Disclaimer – Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Copper Futures Quotes Globex

    • All market data contained within the CME Group website should be considered as a reference only and should not be used as validation against, nor as a complement to, real-time market data feeds. Settlement prices on instruments without open interest or volume are provided for web users only and are not published on Market Data Platform (MDP). These prices are not based on market activity.
Month Options Charts Last Change Prior Settle Open High Low Volume Hi / Low Limit Updated
  • Legend:
  • Options
  • Price Chart
  • About This Report

About Copper

Copper futures are hedging tools that offer copper price mitigation opportunities to a range of market participants. They also provide global price discovery and opportunities for portfolio diversification, as well as:

  • Extensive trading opportunities, as copper prices are sensitive to cyclical industries, such as construction and industrial machinery manufacturing, as well as to political situations in countries where copper mining is government-controlled
  • The benefits of central clearing, including guaranteed counterparty credit and segregation of customer funds
  • Copper price transparency, giving all market participants equal access while maintaining anonymity in all bids and offers

Things to know about the contracts:

  • Physically delivered
  • Block-trade eligible
  • Can be traded off-exchange for clearing only through CME ClearPort
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