What is Copper Futures Trading?
Copper futures trading is the act of buying or selling an exchange-traded copper futures contract in which the purchasing party agrees to accept delivery for a specific quantity of copper, in this case 25 tonnes per contract, for a pre-established price on a pre-established date. There is always a demand for copper, so many who trade copper see it as an insurance policy and will use it to hedge against risker trades.
How Can I Buy Copper Futures?
You can buy copper futures by opening an account with a futures broker and purchasing a copper futures contract through your account. You will need to maintain a large enough balance in your futures trading account to fulfill your margin requirements on your copper contract. However, before purchasing a copper futures contract it is important to familiarize yourself with copper futures fundamentals and to learn how the copper exchange works. The best way to do this is to look at historic copper futures charts and copper futures prices. This will give you a better understanding of how the copper and metals market works.
What Unit is Copper Traded In?
Copper futures are traded in tonnes, specifically 25 tonnes per contract. A tonne is a metric unit of mass that it equal to about 2,204.6 pounds, or 1000 kilograms. The copper futures symbol is “HG” and can be traded on the CME Comex exchange Sunday-Friday from 6:00 p.m. until 5:.00 p.m. Copper futures can be traded year-round with contract expirations happening in all twelve months.
How Do You Trade Copper Futures?
You can trade copper futures by purchasing or selling copper futures contracts through your brokerage account. When you buy a copper futures contract, or any futures contract for that matter, you are acquiring a ton of leverage of whichever commodity you are purchasing. Leverage refers to owning a lot of a certain commodity while only having to put up a fraction of what the contract is worth. This fraction is called margin. The margin requirement for copper futures is roughly $4,000. Essentially, you are controlling over $90,000 worth of copper for only $4,000. Copper futures and options can be a very enticing investment for traders because they are relatively safe, and their value can signify a growing or expanding economy.
How Much is a Copper Future?
Like any commodity the copper futures price fluctuates daily based on several factors. Some of these factors include demand for the contract, demand for physical copper, copper supply, U.S. dollar value, metal demand, and several others. At the time of this writing, copper is trading at $4.33/lb. This puts the copper futures contract price at roughly $108,000. Again, this price can move and change by the day, but you can always count on it being quite a bit of money. However, remember that you do not have to put up the total value of the contract upon purchase, you are only responsible for your margin requirement.
Is Copper Traded as a Commodity?
Unlike its other metal cousins, gold and silver, copper futures are traded as a commodity, not a precious metal. The reason copper is considered a commodity is because of its wide use in large quantities worldwide. Copper is used in plumbing, communication, and everything in between. You can find copper futures listed as a commodity on the London Metal Exchange (LME), the Comex, and on the Multi-Commodity Exchange.
How Can RJO Futures Help Investing in Copper
RJO Futures has a team of knowledgeable and experienced Senior Market Strategists that would be more than glad to assist you in trading copper futures. Please feel free to contact us with any questions or concerns and a Senior Market Strategist will reach out to you right away. You can also visit our Copper Futures page to see a real-time copper chart along with the latest movements and price quotes.