Cotton Trading
Defined and Explained
Cotton is
the soft fiber that grows around the seeds
of the cotton plant.
Cotton
is most often spun into thread and used
to make a soft, breathable textile, which is the most widely
used natural-fiber cloth in clothing today. Africa and
South America
are large providers of cotton.

Cotton Trading
Prices/Rates
The contract for cotton is fixed and standardized,
allowing cotton traders to focus on pricing.
The
Contract Size for
cotton is 50,000 pounds net
weight.
The Minimum Price
Movement within a cotton contract is
5/100 of a cent, or $5 per contract.
Cotton Trading
Cotton
futures have been trading in the
U.S.
since 1870 at New York’s
original futures exchange. The NYBOT cotton
options market, opening in 1984, represents one of the most
active agricultural options markets in the world.
Although in the past, there were many
state cotton exchanges.
The NYCE and the Memphis Cotton Exchange
are still in operation today.
Cotton Trading
Software
Ask any
cotton trader, producer or general investor what
trading tools or types of financial analysis he is using to
track
cotton
prices and you're probably going to hear a list of
different technologies and methods. However, having the
right tool for the job is important.
Trading software can be used to boost an existing
approach by supplying an inter-market perspective. The key to a
cotton trading system is its ability to
forecast moving averages.
One of the better
cotton
trading
software products is VantagePoint trading software.
This software can help “see” what is likely to happen in
the cotton market before other traders (using
only single-market analysis) catch wind of it.
Cotton Trading
Major Indicators and indices
Successful cultivation of
cotton requires a long growing season, and production
of the crop for a given year usually starts soon after
harvesting the preceding autumn. Cotton trading
contracts are for
March, May,
July, October, December (Current month plus one or more of the
next 23 succeeding months).
The
last cotton trading day is seventeen
business days from end of spot month.
Cotton Trading
News
The National
Cotton
Council of America provides information on, and promotes
cotton trade in the U.S.
The USDA gives information on cotton
production, pricing and import/export data.
The
International Cotton Association promotes
global information on the cotton trade and
gives some trend insight for cotton traders.
The cotton market is truly an international one.
The National Australian Cotton Trade
Show brings
Australia’s cotton
producers together.
Many other countries feature their own versions of major
cotton trade shows as well.
Cotton Trading
History
Cotton has
served as one of the first “currencies” of world trade.
Some
authorities claim that it was likely that the Egyptians had
cotton as early as 12,000 BC. Cotton continues
to be important today in all countries as a manufacturing staple
and trading element.
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