Copper Futures and Options Trading - COMEX
Hedging with Copper Futures
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Copper Financial Futures
COMEX Copper Futures
Copper is widely considered as one of the key cyclical commodities, given its extensive usage in construction, infrastructure and an array of equipment manufacturing. The biggest end-use is for the production of cables, wiring and electrical goods because of its excellent electricity conducting properties. The construction sector is the second largest user of copper, for plumbing, HVAC and building wiring applications.
Although found in abundance and widely extracted as well as recycled, the copper value chain is quite capital intensive. This makes the market susceptible to supply-side constraints, and therefore, volatile price fluctuations.
Copper’s importance in world markets and responsiveness to global economic events make our high-grade COMEX copper futures and options contracts important risk management tools for commercial interests, as well as a potentially rewarding opportunity for investors who wish to participate in this market.
Copper futures are hedging tools that offer price mitigation opportunities to a range of copper market participants. They also provide global price discovery and opportunities for portfolio diversification, as well as:
- 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
- The benefits of central clearing, including guaranteed counter-party credit and segregation of customer funds
- Price transparency, giving all market participants equal access while maintaining anonymity in all bids and offers
Introduction to Base Metals
Base metals are non-ferrous industrial metals including copper, aluminum, lead, nickel, tin and zinc. These metals appear in both industrial and commercial applications, therefore list of market participants who could hedge their price risk is vast. Some firms are hedging a physical price exposure due to their involvement in the supply chain of the metal, while others trade base metals as an investment asset. Discover how base metals futures can help you take part in the opportunities of this market, from how the contracts are constructed to how they may fit into your trading strategy.
Things to know about the contracts:
- Physically delivered
- Block-trade eligible
- Can be traded off-exchange for clearing only through CME ClearPort
About copper futures
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.
Product Symbol HG
Venue CME Globex, CME ClearPort, Open Outcry (New York)
(All Times are New York Time/ET)
CME Globex: Sunday – Friday 6:00 p.m. – 5:15 p.m. (5:00 p.m. – 4:15 p.m. Chicago Time/CT) with a 45-minute break each day beginning at 5:15 p.m. (4:15 p.m. CT)
CME ClearPort: Sunday – Friday 6:00 p.m. – 5:15 p.m. (5:00 p.m. – 4:15 p.m. Chicago Time/CT) with a 45-minute break each day beginning at 5:15 p.m. (4:15 p.m. CT)
Open Outcry: Monday – Friday 8:10 a.m. – 1:00 p.m. (7:10 a.m. – 12:00 p.m. CT)
Contract Size 25,000 pounds
Price Quotation U.S. Cents per pound
Please note: Prices are disseminated in U.S. Dollars and Cents
Minimum Fluctuation $0.0005 per pound
Termination of Trading Trading terminates on the third last business day of the delivery month.
Listed Contracts Trading is conducted for delivery during the current calendar month, the next 23 calendar months, and any March, May, July, September, and December falling within a 60-month period beginning with the current month.
Settlement Type Physical
Settlement Procedure Daily Copper Futures Settlement Procedure (PDF)
Final Copper Futures Settlement Procedure (PDF)
Delivery Period Delivery may take place on any business day beginning on the first business day of the delivery month or any subsequent business day of the delivery month, but not later than the last business day of the current delivery month.
Trading at Settlement (TAS) Trading at Settlement is allowed in the active contract month. The active contract months will be March, May, July, September and December. On any given date, TAS transactions will be allowed only in a single contract month. TAS transactions may be executed at the current day's settlement price or at any valid price increment ten ticks higher or lower than the settlement price.
Grade and Quality Specifications The contract (basis) grade for the Grade 1 copper contract shall be Grade 1 Electrolytic Copper Cathodes (full plate or cut) and shall conform to the specifications (as to chemical and physical requirements) for Grade 1 Electrolytic Copper Cathode as adopted by the American Society for Testing and Materials (B115-00), or its latest revision.
Position Limits NYMEX Position Limits
Rulebook Chapter 111
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