Cotton Futures and Options

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These 126-year-old contracts call for 50,000 lbs. of cotton. Cotton typically is planted in April or in May,and the first few weeks of development are crucial.

China has led the world in cotton production for years. Uzbekistan is the world's second leading exporter. Government reporting for third world producers lacks for cotton as well as other softs, but for some countries, such as India and Pakistan, university extension services provide quality statistics. These generally come by way of the universities or wire services.

While China exports extremely little compared to other exporters, its demand role is huge. China's stocks also underline the country's significance. These again are approaching half of world stocks.

The United States is a large consumer of cotton. Use has trended higher due to consumers' favor for cotton clothing. Textiles have a thin profit margin. It's made worse by competition from man-made fibers, such as polyester and rayon which are far cheaper than cotton.

Cotton No. 2 Contract Specifications

Cotton Futures

Trading Unit - 50,000 lbs. net weight (approximately 100 bales).

Trading Hours - 1:05 pm to 3:00pm NY time.

Price Quotation - Cents and hundreths of cent per pound

Trading Months - Current month plus one or more of the next twenty-three succeeding months. Active trading months: March, May, July, October, December.

Ticker Symbol - CT

Minimum Fluctuation - 1/100 of a cent (one "point") per pound below 95 cents per pound. 5/100 of a cent (or five "points") per pound at prices of 95 cents per pound on higher. Spreads may always trade and be quoted in one point increments, regardless of price levels.

Last Trading Day - Seventeen business days from end of spot month.

First Notice Day - Five business days from end of preceding month.

Daily Price Limit - 3 cents above or below previous day's settlement price. However, if any contract months settles at or above $1.10 per pound, all contract months will trade with 4 cent price limits. Should no month settle at or above $1.10 per pound, price limits stay (or revert) to 3 cents per pound. Spot month - no limit on or after first notice day.

Point Value - $5.00

Delivery Points - Galveston, TX; Houston, TX; New Orleans, LA; Memphis, TN; Greenville/Spartanburg, S.C.

Cotton Options

Trading Unit - One New York Cotton Exchange Cotton No. 2 Futures Contract

Trading Hours - See Cotton Futures

Price Quotation - Prices quoted in cents and hundreths of a cent

Trading Months - March, May, July, October and December. The nearest ten delivery months will be available for trading.

Ticker Symbol - CT

Minimum Fluctuation - Prices quoted in cents and hundreths of a cent

Last Trading Day - The last Friday which precedes first notice day for the underlying future by at least five business days

Expiration Date/Time - Until 5:00 p.m (New York time) on any trading day including last trading day. Automatic exercise at one tick or more in-the-money at expiration on last trading day.

Daily Price Limits - None

Strike Price Increments - 1 cent increments

Minimum Price Fluctuation - 1/100 of a cent

Point Value - $5.00

Position Limits - See Cotton Futures specifications for combined Futures/Options Limits