What are cocoa futures?

Futures are contracts where the trader agrees to buy a set amount of an asset (in this case cocoa) at a set price in the future. Despite being a global commodity, only a few exchanges offer cocoa futures, such as the New York Mercantile Exchange (NYMEX), which is part of the Chicago Mercantile Exchange (CME) and the Intercontinental Exchange (ICE).

What is cocoa trading?

Cocoa trading of options contracts is offered by both the CME and ICE. With these contracts, the trader pays a premium for the option (not the obligation) to exercise and purchase the asset in the future. Both exchanges offer options on their physically delivered cocoa futures contract.

How to play the cocoa market?

Cocoa is used in making cocoa liquor, cocoa butter, and cocoa powder, which are used in the production of chocolate and chocolate-flavored products. The best way to play the cocoa market is by trading cocoa futures contracts on the ICE or CME. Here is our archive with articles about other tradeable futures markets.

What is the tick size of cocoa futures?

Cocoa futures have a tick size of $10, and expire in the months of March, May, July, September, and December. The size of each cocoa contract on the NYMEX is 10 metric tons. 2. What are cocoa futures? The term cocoa futures refers to futures contracts that allow traders to buy or sell a contract today to be settled at a future date.