What are copper futures?
Copper futures (HG) are exchange-traded contracts on the New York Mercantile Exchange (NYMEX). Copper is the world's third most widely used metal after iron and aluminum and is primarily used in industries such as construction and industrial machinery manufacturing. While there are a lot of trading opportunities around the cyclical nature of these main industries, copper futures are also sensitive to the political situation, particularly in those countries where copper mining is a government-controlled enterprise.
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How to trade copper futures
Copper futures contracts are offered through NYMEX on the Globex® trading platform and are available to trade electronically through Schwab nearly 24 hours per day, 6 days per week. In addition to copper futures, COMEX-listed gold futures contracts (GC) and NYMEX-listed silver futures contracts (SI) are available to trade at Schwab nearly 24 hours per day, 6 days per week. An account approved to trade futures is required in order to trade copper futures.
Copper futures contract specifications
Considering trading copper futures? Here are the copper futures contract specifications.
|Exchange, Product Name, Product Code||COMEX, Copper, HG|
|Contract Size||25,000 pounds|
|Minimum Tick Size and Value||0.0005, worth $12.50 per contract.|
|Trading Times||Electronic trading of copper futures is conducted from 6:00 p.m. U.S. ET until 5:00 p.m. U.S. ET via the CME Globex® trading platform, Sunday through Friday.|
|Principal Trading Months||There are copper futures contracts with expirations all twelve months of the year.|
At Schwab, you also get access to advanced trading platforms and education, where you can take advantage of market research, real-time copper futures quotes, and other specialized tools.
Why trade copper futures?
Copper futures contracts (HG) can be used for hedging or speculating. Companies that rely on copper for manufacturing, especially those in highly cyclical industries that rely on copper, like building and manufacturing, can trade them to lock-in, or hedge, a future price for the precious metal. Similarly, speculative traders can use copper futures as a risk management tool and participate in the markets without any physical backing of the material and to express investor sentiment on the future price of copper.
It is important to understand the benefits and risks involved with copper futures before placing a futures trade. Compared to traditional investments, with copper futures you can trade nearly 24 hours a day during the trading week and take advantage of trading opportunities regardless of market direction. Copper futures also provide the ability to trade with greater leverage and allow a more efficient use of trading capital. However, trading leveraged products like copper futures also involves the risk that losses can exceed the amount originally invested and may not be suitable for all investors.
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