Sugar Futures Trading Basics

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Sugar Futures Trading Basics

Sugar futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of sugar (eg. 112000 pounds) at a predetermined price on a future delivery date.

Sugar Futures Exchanges

You can trade Sugar futures at NYSE Euronext (Euronext) and Tokyo Grain Exchange (TGE).

Euronext Raw Sugar (No. 408) futures prices are quoted in dollars and cents per pound and are traded in lot sizes of 112000 pounds (50 long tons).

Euronext White Sugar (No. 407) futures are traded in units of 50 tonnes and contract prices are quoted in dollars and cents per metric ton.

TGE Raw Sugar futures prices are quoted in yen per metric ton and are traded in lot sizes of 50 tonnes .

Exchange & Product Name Symbol Contract Size Initial Margin
Euronext Raw Sugar (No. 408) Futures
(Price Quotes)
RSU 112000 pounds
(Full Contract Spec)
USD 1,456 (approx. 12%)
(Latest Margin Info)
Euronext White Sugar (No. 407) Futures
(Price Quotes)
WSG 50 tonnes
(Full Contract Spec)
USD 1,650 (approx. 10%)
(Latest Margin Info)
TGE Raw Sugar Futures
(Price Quotes)
50 tonnes
(Full Contract Spec)
JPY 75,000 (approx. 6%)
(Latest Margin Info)

Sugar Futures Trading Basics

Consumers and producers of sugar can manage sugar price risk by purchasing and selling sugar futures. Sugar producers can employ a short hedge to lock in a selling price for the sugar they produce while businesses that require sugar can utilize a long hedge to secure a purchase price for the commodity they need.

Sugar futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable sugar price movement. Speculators buy sugar futures when they believe that sugar prices will go up. Conversely, they will sell sugar futures when they think that sugar prices will fall.

Learn More About Sugar Futures & Options Trading

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Buying Straddles into Earnings

Buying straddles is a great way to play earnings. Many a times, stock price gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected great results. [Read on. ]

Writing Puts to Purchase Stocks

If you are very bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options on the stock as a means to acquire it at a discount. [Read on. ]

What are Binary Options and How to Trade Them?

Also known as digital options, binary options belong to a special class of exotic options in which the option trader speculate purely on the direction of the underlying within a relatively short period of time. [Read on. ]

Investing in Growth Stocks using LEAPS® options

If you are investing the Peter Lynch style, trying to predict the next multi-bagger, then you would want to find out more about LEAPS® and why I consider them to be a great option for investing in the next Microsoft®. [Read on. ]

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Effect of Dividends on Option Pricing

Cash dividends issued by stocks have big impact on their option prices. This is because the underlying stock price is expected to drop by the dividend amount on the ex-dividend date. [Read on. ]

Bull Call Spread: An Alternative to the Covered Call

As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less capital requirement. In place of holding the underlying stock in the covered call strategy, the alternative. [Read on. ]

Dividend Capture using Covered Calls

Some stocks pay generous dividends every quarter. You qualify for the dividend if you are holding on the shares before the ex-dividend date. [Read on. ]

Leverage using Calls, Not Margin Calls

To achieve higher returns in the stock market, besides doing more homework on the companies you wish to buy, it is often necessary to take on higher risk. A most common way to do that is to buy stocks on margin. [Read on. ]

Day Trading using Options

Day trading options can be a successful, profitable strategy but there are a couple of things you need to know before you use start using options for day trading. [Read on. ]

What is the Put Call Ratio and How to Use It

Learn about the put call ratio, the way it is derived and how it can be used as a contrarian indicator. [Read on. ]

Understanding Put-Call Parity

Put-call parity is an important principle in options pricing first identified by Hans Stoll in his paper, The Relation Between Put and Call Prices, in 1969. It states that the premium of a call option implies a certain fair price for the corresponding put option having the same strike price and expiration date, and vice versa. [Read on. ]

Understanding the Greeks

In options trading, you may notice the use of certain greek alphabets like delta or gamma when describing risks associated with various positions. They are known as “the greeks”. [Read on. ]

Valuing Common Stock using Discounted Cash Flow Analysis

Since the value of stock options depends on the price of the underlying stock, it is useful to calculate the fair value of the stock by using a technique known as discounted cash flow. [Read on. ]

Futures Trading Basics

A futures contract is a standardized contract that calls for the delivery of a specific quantity of a specific product at some time in the future at a predetermined price. Futures contracts are derivative instruments very similar to forward contracts but they differ in some aspects.

Futures contracts are traded in futures exchanges worldwide and covers a wide range of commodities such as agriculture produce, livestock, energy, metals and financial products such as market indices, interest rates and currencies.

Why Trade Futures?

The primary purpose of the futures market is to allow those who wish to manage price risk (the hedgers) to transfer that risk to those who are willing to take that risk (the speculators) in return for an opportunity to profit.

Hedging

Producers and manufacturers can make use of the futures market to hedge the price risk of commodities that they need to purchase or sell in order to protect their profit margins. Businesses employ a long hedge to lock in the price of a raw material that they wish to purchase some time in the future. To lock in a selling price for a product to be sold in the future, a short hedge is used.

Speculation

Speculators assume the price risk that hedgers try to avoid in return for a possibility of profits. They have no commercial interest in the underlying commodities and are motivated purely by the potential for profits. Although this makes them appear to be mere gamblers, speculators do play an important role in the futures market. Without speculators bridging the gap between buyers and sellers with a commercial interest, the market will be less fluid, less efficient and more volatile.

Futures speculators take up a long futures position when they believe that the price of the underlying will rise. They take up a short futures position when they believe that the price of the underlying will fall.

Example of a Futures Trade

In March, a speculator bullish on soybeans purchased one May Soybeans futures at $9.60 per bushel. Each Soybeans futures contract represents 5000 bushels and requires an initial margin of $3500. To open the futures position, $3500 is debited from his trading account and held by the exchange clearinghouse.

Come May, the price of soybeans has gone up to $10 per bushel. Since the price has gone up by $0.40 per bushel, the speculator can exit his futures position with a profit of $0.40 x 5000 bushels = $2000.

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Buying Straddles into Earnings

Buying straddles is a great way to play earnings. Many a times, stock price gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected great results. [Read on. ]

Writing Puts to Purchase Stocks

If you are very bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options on the stock as a means to acquire it at a discount. [Read on. ]

What are Binary Options and How to Trade Them?

Also known as digital options, binary options belong to a special class of exotic options in which the option trader speculate purely on the direction of the underlying within a relatively short period of time. [Read on. ]

Investing in Growth Stocks using LEAPS® options

If you are investing the Peter Lynch style, trying to predict the next multi-bagger, then you would want to find out more about LEAPS® and why I consider them to be a great option for investing in the next Microsoft®. [Read on. ]

Effect of Dividends on Option Pricing

Cash dividends issued by stocks have big impact on their option prices. This is because the underlying stock price is expected to drop by the dividend amount on the ex-dividend date. [Read on. ]

Bull Call Spread: An Alternative to the Covered Call

As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less capital requirement. In place of holding the underlying stock in the covered call strategy, the alternative. [Read on. ]

Dividend Capture using Covered Calls

Some stocks pay generous dividends every quarter. You qualify for the dividend if you are holding on the shares before the ex-dividend date. [Read on. ]

Leverage using Calls, Not Margin Calls

To achieve higher returns in the stock market, besides doing more homework on the companies you wish to buy, it is often necessary to take on higher risk. A most common way to do that is to buy stocks on margin. [Read on. ]

Day Trading using Options

Day trading options can be a successful, profitable strategy but there are a couple of things you need to know before you use start using options for day trading. [Read on. ]

What is the Put Call Ratio and How to Use It

Learn about the put call ratio, the way it is derived and how it can be used as a contrarian indicator. [Read on. ]

Understanding Put-Call Parity

Put-call parity is an important principle in options pricing first identified by Hans Stoll in his paper, The Relation Between Put and Call Prices, in 1969. It states that the premium of a call option implies a certain fair price for the corresponding put option having the same strike price and expiration date, and vice versa. [Read on. ]

Understanding the Greeks

In options trading, you may notice the use of certain greek alphabets like delta or gamma when describing risks associated with various positions. They are known as “the greeks”. [Read on. ]

Valuing Common Stock using Discounted Cash Flow Analysis

Since the value of stock options depends on the price of the underlying stock, it is useful to calculate the fair value of the stock by using a technique known as discounted cash flow. [Read on. ]

Trading Tutorials – Trading Basics

Here you’ll find trading tutorials focused on trading basics. Articles are on preparation for trading, charting basics, market tendencies, managing expectations, statistics and controlling trades.

Trading Basics

4 Common Questions From New Traders, Answered – Most new traders starting out have similar questions. While strategies and trading psychology are tackled at a later stage, new traders typically want to know: Can successful short-term trading actually be done? Can it provide a living/income? How long does it take to become profitable? And how does one get started? These questions are answered below.

Day Trading Basics: The Bid / Ask Spread Explained – The Bid/Ask spread is how prices move, and affects what you pay for a stock, commodity or any asset.

5 Step Plan For Forex (or Other Market) Trading Success – A strategy alone won’t make you a better trader. Follow this 5 step plan, which focuses on effectively implementing your strategies, to create forex trading success.

Day Traders: How and Why to Use a Daily Stop Loss – Controlling daily losses is as important as controlling losses on each trade, here is how day traders can control their daily losses so a single day doesn’t ruin their weekly or monthly income.

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My 5 Step Daily Trading Routine For Success – A 5 step daily trading routine to make sure your trading day goes smoothly. Including what to do before and after the opening and closing bell.

Defining Factor Makes or Breaks Traders: The Trading Losing Streak – No one likes to talk about losing, but it happens. It is how you deal with it when it happens that will determine you success.

Trading Tips from Legendary Millionaire Trader – One of the market greats shares some insights with you.

Learn How to Make a Trading Plan – Without a plan, you’re gambling. Any business requires a well thought out plan, trading is no different. Here is how to prepare a plan for your trading.

The Trading Plan: What You Need to Know – Radio Interview – Traders Talk Live Radio interview on creating a trading plan – why traders need one and the process of developing a profitable one. Here’s the transcript.

  • Charting Basics
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Market movements are not totally random, although they may have elements of randomness, these trading tutorials focus on recurring price patterns that repeat over and over again through bull and bear markets.

Focus on ‘Middle Waves’ for High Probability Trades – A trend unfolds in stages, with the middle stage typically being easy to spot and the most lucrative. Here’s how to trade it. The entry technique and trade setup applies to other waves as well, not just the middle wave(s). For more examples and another way of “looking at it” see ABC Forex Trading Strategy – Video (can be used in other markets)–the trade trigger is quite similar except we are looking at the market and setups in a slightly different way, which may appeal to certain traders.

Elliott Wave Basics: Trading Impulsive and Corrective Waves – Even if you never delve further into Elliott Wave theory, the concept of impulsive and corrective waves will greatly aid your trading. These two types of waves create the overall market structure, and therefore being able to tell the difference between them is the difference between taking high probability trades or low probability trades.

Technical Analysis: Support and Resistance Basics – Support and resistance form the basis for many trading strategies and technical analysis methods. Here are support and resistance basics you need to know

  • Managing Expectations

Trading tutorials to help you establish your goals, understand common pitfalls and see what you can expect/what you’re up against.

What’s the Day Trading Success Rate? The Thorough Answer – We look at how many traders actually are successful, and provide the percentages for men and women who try. Stats are based on thousands of traders to tried to make a go of it at day trading firms across Canada and the US.

How Long Does It Take to Become a Successful Trader? The Thorough Answer – Here’s the thorough answer of how long it takes to become a successful trader, based on time invested, quality of practice, capital and overcoming adversity.

Trading Psychology – The 4 Stages of Trader Development – Four very broad stages you will go through as a traders; by understanding the stages you may be able to accelerate your progress and avoid common pitfalls.

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A basic understanding of how humans don’t properly assess probabilities can help your trading. These trading tutorials will help you see where you make errors in rational and probabilistic decision making.

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What is Trading Expectancy and How it Works – Master trading expectancy and you don’t even need to have more wins than losses to prosper.

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Reducing the Risk of Catastrophic Trading Losses (It Happens! Are You at Risk?) – Your risk management strategy and/or stop loss orders won’t always be effective, resulting in way bigger losses than expected. See why and how you may be risking more than you think; see recent real world examples where loads of short-term traders got annihilated; then, see how to reduce the chances of it happening to you.

Proper Position Sizing – Are you trading the right size?

Where to Set Stop Loss When Trading: How to properly manage risk, along with a couple videos.

Risk Spikes – Risk Management Mistakes That Ruin Traders – What a Risk Spike is, why it happens and how to control it.

How to Avoid Overtrading on Quiet Days – Some “distractions” if you tend to overtrade when bored.

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You Might Be a Day Trader If… – A funny video looking at how day traders may start to incorporate their trading practices into the real world.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    1st Place! Best Binary Broker 2020!
    Best Choice for Beginners — Free Education + Free Demo Acc!
    Sign-up and Get Big Bonus:

  • Binomo
    Binomo

    2nd place! Good choice!

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