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COTTON #2
Contract History
ICE Futures U.S. Cotton No. 2 contract utilizes complex grading standards
to guarantee the quality of the cotton in the contract, and ensure its ability to accurately reflect market conditions. Adjustments
are made to the contract as needed; relative to cash market moves, crop characteristics and industry practices. Cotton futures have been trading since 1870 at New York's original futures
exchange. The ICE Futures U.S. cotton options market, opening in 1984, represents one of the most active agricultural options
markets in the world. This universal fiber dates back to over five thousand years ago and served as one of the first "currencies"
of world trade. Raw cotton fiber is produced and consumed
globally, and has certain qualitative characteristics and quantitative elements. These attributes allow cotton to be standardized
for trade in futures markets. The continuity of the cotton futures market relies heavily on a contract's ability to reflect
cash market conditions and practices. Cotton's world-wide
appeal and vulnerability to unforeseen natural and man-made events raises the economic stakes for this commodity, attracting
hedgers, speculators and risk managers to what is one of the most actively traded and highly liquid markets in the world. Click here for a list of cotton producing countries.
Cotton Futures & Options Brochure
Click on the link above to download a very informative .pdf brochure entitled "Cotton
Futures & Options". It was published by the New York Board of Trade. This is a must read guide for any novice or
advanced trader considering an investment in the cotton commodity futures and options markets.
Click
here to contact a licensed commodities broker with experience in the cotton market.
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