CMX COPPER (XCH)
Copper futures are hedging tools that offer price mitigation opportunities to a range of copper market participants.
The futures contracts gives extensive trading opportunities, as 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.
Copper, one of the oldest and easily mined commodities, is the world's third most widely used metal, after iron and aluminum. Five thousand years ago, people learned to alloy copper with tin, producing bronze and giving rise to a new age.
Copper today is primarily used in highly cyclical industries such as construction and industrial machinery manufacturing. Profitable extraction of the metal depends on cost-efficient high-volume mining techniques, and supply is sensitive to the political situation particularly in those countries where copper mining is a government-controlled enterprise.
The contract is traded on the future market of CME.
Summary Contract Specifications
- Underlying value : Copper
- Contract Size : 25.000 pound
- Value of the contract : copper price x 25.000 pound
- Minimum fluctuation: 0,0005 points (= $ 12,5 per contract)
- Settlement type: physical
- Periodicity : monthly
- Delivery Period : the third last business day of the delivery month.
Trading example
- Copper quotes 3,3740 on the 15th of january 2010.
- The underlying value of one future contract of copper is 3,3740 x 25.000 = $ 84.350
- Buy at 3,3740 and sell at 3,3780.
- 1 tick is 0,0005 index point.
- Profit: 0,0040 x 25.000 = $ 100
