Copper Futures Definition
All the main commodity market exchanges of the world offer Copper futures. In India MCX – Multi Commodity Exchange and NCDEX are popular exchanges for Copper Futures Trading. Let’s discuss now copper futures in this article.
Copper Futures drive prices from multiple factors including the influence of Speculative actions. Commodity markets demonstrate cyclical movement in price curve, and Copper shows a co-relation to the same.
Trading in copper futures is similar to trading in equity futures. Copper futures are nothing but exchange-traded standardised contracts between a buyer and a seller in which buyer is under obligation by a binding contract to take delivery of a specific quantity of copper at the certain pre-decided price on a future date.
Usage of Copper Futures
Copper explorers and copper consumers use copper futures to hedge their price/cost. Copper producers can lock in their selling price by shorting copper future against inventory.
Similarly, copper consumers can fix their purchasing price by going long on copper futures.
Copper is one of the favourite commodity of Speculators also. By anticipating price movement of underlying, speculators long or short future contracts often and preferably settles in cash (settling the difference amount between buying price of future and the spot price at the time of expiry). For trading Copper, if one focuses on price action and does a proper technical analysis, it can be a remunerative activity since this market cannot be manipulated.
Factors driving Copper Commodity Prices and therefore Copper Futures Contracts
- Approval by Environmental Protection Agency to the use of Copper alloys as an antimicrobial is a breakthrough. Copper is the 1st instance where a solid item is approved as antimicrobial. It is going to boost the demand for copper in germ-sensitive areas.
- Copper is an integral part of electrical appliances such as printed circuit boards, lead-free solder, microwave ovens, waveguides, integrated circuits, electromagnets, wiring, and piping.
- Commodity-specific events, such as the construction of new production facilities or processes, new uses or the discontinuance of historical uses, unexpected mine or plant closures (natural disaster, supply disruption, accident, strike, and so forth), or industry restructuring—all affect the price of the metal.
- Indian copper prices reflect prevailing international spot market and the USD–INR exchange rates.
- Trade policies set by the government (implementation or suspension of taxes, penalties and quotas) affect supplies as they regulate (restricting or encouraging) material flow.
Quick Facts on Copper Commodity Trading and MCX Copper Contract Specifications –
Copper Trading Symbol – COPPERDDMMMYYYY
Instrument Type – COMMODITY FUTURES
Lot Size (Units) – 1 Metric ton.
Initial Margin – The margin applicable is the higher of SPAN Margin or 4%. To check copper margin requirements for trading in the MCX, check the commodity span calculator.
ELM Margin – 1%
Lot Size (Value) – Price of 1000 kg copper.
Tick Size – Re. 5 paise per kg.
Underlying – Copper
Trading Time – Copper can be traded during the regular MCX market timings.
Trading Copper Futures Live on the SAMCO Trading Platforms
For trading in Copper futures, clients must open a commodity trading account and must activate the exchange segment – MCX. Subsequently, the Copper futures contracts can be added and traded on the live trading terminal. Traders must select the Exchange MCX, Instrument Copper, and Contract Expiry as desired.
Traders have access to the live Copper futures prices which are streamed live from the exchanges and can also access Intraday Copper futures charts and historical Copper futures charts.
Brokerage for Trading Copper Futures
With SAMCO, India’s leading discount broker, Copper futures, can be traded at Flat Rs. 20 per executed order or 0.02% of turnover whichever, is lower. Calculate your savings for trading Copper futures on the commodity brokerage calculator.
Other Charges applicable while trading Copper Futures