COMEX Copper-The True, Transparent Global Reference Price

  • 21 Mar 2019
  • By CME Group
  • Topics: Metals

The price of copper has long been viewed as a bellwether of global economic growth, given its widespread use in our everyday lives. Its relative abundance and affordability, combined with its ductility, malleability, resistance to corrosion and heat, and electrical conductivity makes copper versatile for a wide variety of applications. Copper’s unique qualities give rise to both hedging by physical trading participants and speculative and macro-related positiontaking by financial trading participants. COMEX, a division of CME Group, has offered copper futures contracts, originally, since COMEX was incorporated in 1933, and in its current high-grade offering (COMEX HG) since 1988. The traditional, open outcry pit trading platform has been replaced by electronic, onscreen trading capabilities. COMEX Copper is offered in monthly futures contracts. This means there is one contract to trade for each calendar month. For example, if a trader initiates a position in COMEX Copper for the May 2019 contract, to liquidate that position, an opposite May 2019 contract needs to be traded. All COMEX Copper contracts are readily available to trade via CME Globex – CME’s electronic trading platform – as well as bilaterally negotiated and posted as block trades via CME Clearport.

Liquidity and Transparency

The measures of a robust futures contract have certain key characteristics, including liquidity (the ability to buy and sell contracts easily), and transparency (where relevant information is fully and freely available to the public). Liquidity on COMEX is best viewed by Average Daily Volume (ADV). Total COMEX Copper Futures ADV in 2018 has dramatically increased since 2014. 2018 ADV equates to 1.5 million metric tons traded every day

COMEX Copper Options have shown exponential growth in ADV and Open Interest. 

With the onset of electronic trading across financial markets, CME Group introduced CME Globex to the trading world and volume has migrated to the electronic trading screen. CME Globex is the premier electronic trading system providing global connectivity to a wide array of futures and options across all asset classes. As of February 2019, 99% of total COMEX Copper futures and 71% of COMEX Copper Options are transacted electronically.

Electronic ADV/Total ADV

Real Time Transparency

Robust market depth for COMEX Copper Futures and Options can be accessed nearly 24-hrs onscreen via CME Globex. 

Futures

Options

Liquidity During Non-U.S. Market Hours

  • 36% of Total ADV is transacted during Asian Hours and
  • 65% of Total ADV is transacted during European Hours

Transparency in Settlement Prices

Daily settlement prices for COMEX Copper Futures are derived solely from trading activity on CME Globex during the settlement period (12:59-13:00 ET). This ensures the most transparent settlement possible and can be traded onscreen as HGT (TAS-Trade at Settlement).

Electronic trading is transparent, can be accessed by all, and ensures all clients (whether commercial or financial in nature) receive the best available price when they interact with the market. With 99% of volume transacted taking place via CME Globex, total volume continuously and consistently increasing, around the clock liquidity and settlement prices based on electronically traded contracts, COMEX Copper is a key source of global price discovery, liquidity and transparency.

If you would like to speak to the metals team about copper futures and options please contact metals@cmegroup.com

Get up to date metals information by following our LinkedIn page