Copper may be one of the original members of the commodity trading world. Copper was first worked about 7,000 years ago and its softness, color and abundance made it a widely desired commodity. Today, this metal is a perfect indicator of the world’s economy. The third most widely used after iron and aluminum, copper is found in such industrial applications as construction, industrial machine manufacturing and electronics. Because of its demand, trading copper futures has become an important part of futures trading.



Because of the high demand in a wide variety of applications, commodity

investing in copper futures can be very profitable. It is likely that demand will only continue to increase as more applications for this versatile metal are found. As supplies become more difficult to locate, the value of this metal will continue to climb, creating additional investment options for traders in this unique metal.

Reasons To Invest In Copper Futures

Futures trading can be a solid way to profit from investing in copper. As with any other commodity, copper futures provide investors with the ability to buy and sell this metal; a fact which is true for any commodity when trading futures. Futures is the investment strategy where you can purchase the right to buy or sell a commodity at a later date; in addition, you are able to leverage your investments, allowing you to control large sums of a particular commodity for a small price. Copper futures allow you to do this with one of the most versatile assets in the world.

Contract Details For Copper Futures

•Basic Trading Unit - 25,000 pounds

•Units of Price - Dollars and cents per troy ounce

•Tick (Basic Unit Of Change) - $0.0005 per pound or $12.50 per contract. A one cent movement in price creates a $250 movement per contract

•Trading Periods - Options contracts are traded beginning with the current month and typically the following twenty-three months

•Options Trading - Options trading includes market orders such as stop limits, buy straddles and buy strangles, among others

•Margin Requirements - Margins are required for open futures and short options positions. The margin requirement for an options purchaser will never exceed the premium paid

Who Handles The Copper Futures Trading?

Many futures markets exist throughout the world for trading copper futures. One of the most important locations for trading is the COMEX in New York City. This market was formed by a merger between New York Mercantile Exchange and the Commodity Exchange in 1994 and is now the world's largest commodity futures exchange. By trading copper futures at an exchange, you received several distinct advantages:

•Contracts Are Standardized - This ensures that the agreement is consistent with accepted business practices

•Contracts Are Secure - Exchanges are able to offer commodities trading that is affordable and has well-established risk management opportunities

•Contract Prices Are Real-Time - Prices are instantly available to traders

•Contract Parties Are Unknown - Since trades are made through commodity brokers, trades are made anonymously

•Contracts Can Be Delivered Safely - Although futures contracts are rarely ever filled and delivered, futures exchanges offer solutions for safe delivery

•Futures Exchanges Are Ethical - Exchanges offer safe, fair, and orderly markets that are protected by its strict financial standards and surveillance procedures

•Insurance Is Available - Exchanges offer futures options and hedging insurance for additional investment opportunities

Is Investing In Copper Futures Right For You?

Deciding to include copper futures in your investment strategy is a very personal choice. Your trading plan, your investment objectives and your financial situation should all be first considered. Since you are trading on the margin, copper futures are allow you to contract large sums of money and it is even possible to lose more that your original investment while futures commodity trading. You should make sure that you understand copper futures trading and the related conditions before you enter.

Conclusion

Copper is a highly desirable commodity and its futures market can be very profitable. With an ever-increasing demand and increased pressure to mine it, copper futures will continue to be a profitable investment commodity well into the future. If you understand the process and learn the conditions involved, you can be a successful trader in one of the world's oldest commodities.