A group of agricultural commodity trade in the IntercontinentalExchange (ICE), known collectively as the soft, although some products are difficult.
Most of them are related to food, but some are not, but they are all grown. In addition, many of them are grown in the developing world, where statistics are not available and precise as those published by the Department of Agriculture of the United States.
They are: orange juice, cocoa, coffee, cotton, sugar and wood.
All of them are quoted in cents per pound, with the exception of cocoa, which is quoted in dollars per metric ton.
Orange juice comes in a contract of 15,000 pounds. A tic – five hundredths of one percent – is worth $ 7.50.
A cocoa contract is 10 metric tons. One tick is worth $ 10.
A contract 37,500 pounds of coffee. A tic is 5/100s of a penny, so $ 18.75.
A cotton contract is 50,000 pounds. A tic is $ 5.
A contract of 112,000 pounds of sugar is, and a tick is $ 11.20.
Wood comes in a contract of 110,000 board feet, and a tick is $ 11.
Obviously, although all these are the development of world agricultural products grouped on the other hand, have very different characteristics.
Timber deforestation requires of the forest and desert, or harvesting of forest plantations, which requires some years to grow. Some of them seem quite labor intensive, at least in the early stages harvest. I heard that cutting sugar cane is very hot, exhausting work. Castro used to recruit unsuspecting young leftists to go to Cuba to help reap the harvest of sugar cane.
Some are also vulnerable to the weather. A freezing at night in Florida can make the price orange juice rises dramatically. So freezes in Brazil’s coffee crop threat.
The main sugar growing is # 11 and is the reference point worldwide. There is sugar # 14 and # 16 a sugar, but these are grown in the United States and are highly liquid markets. So stick with sugar # 11.
Sugar has traditionally had low margins, and low volatility and risk. However, in recent years have seen price movements volatile.
Wood is not actually traded on the ICE, but is still considered a soft. is also an illiquid market, no novice trader to use.
However, all these products are produced in countries around the world, in South America, Africa and Asia, both in the United States, the capacity of the supply and demand in U.S. markets could be quite complicated.
Is there a place that you can open an account to buy options and futures commodity?
I just want to pay for itself without option margin. I do not want to come with the normal amount of $ 10,000 minimum opening.
OptionsXpress is the one I use.