Why Is Copper Struggling This Year?

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Aug. 18 (Bloomberg) -- On today’s “Futures In Focus,” Averagejoeoptions.com’s Todd Horwitz and Bloomberg’s Kenneth Hoffman discuss the price of copper on “In The Loop.” (Source: Bloomberg)

Very weak.

We're not getting a lot of growth in the developing countries, which have big use for copper.

I think china will try to artificially hold this price up here because of the loan value it's got in their country.

And i think $3 is probably a pretty good level if you're going to play to get involved in copper on the long side.

Looking at it to go back to $4 level.

Let's dive into how that trade might pay off.

One copper contract controls 25,000 pounds of copper.

So of trade makes a profit of $.10 per pound, that is two point $5,000. we think about futures and commodity futures, one that pops up.

Give us an example.

When you look at copper and how traders traded, you can basically go out every single month and buy copper contract.

So i can buy for june of next year, july the year after, etc.

When you take all the different points on the curve and what those vices are paying for, that is your commodity curve.

If it is headed up, that is called contango.

If it is headed down, that is called backwardation.

There are different reasons for that.

What is interesting with the copper curve, your boat.

The price is expected to rise.

From three dollars $.10 a pound today after round $3.15. thereafter, the curve head sharply down from going down to around three dollars a pound over the next few years.

That is where traders like to look at the curve, understand the market, and make their bed.

Because back to what todd was saying at three dollars to four dollar range.

Thank you so much.

We will be back on the markets

This text has been automatically generated. It may not be 100% accurate.


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