What is a cotton future?
A cotton future is a contract that delivers a specific amount of cotton to the buyer, at a fixed price, when the contract expires.
Why do businesses buy into cotton futures?
Cotton futures help businesses budget using a “long hedge” to guarantee affordable prices for raw materials.
How much cotton is included in a cotton futures contract?
Traded on the New York Mercantile Exchange (NYMEX), cotton futures generally include 50,000 pounds of cotton.