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Corn Futures and Options Education
Corn futures and options quick facts:
-
5,000 bushel contract
-
One cent move equals $50
The History of Corn and
Corn Futures Trading
Corn has been called the other yellow
gold because of its value around the globe throughout most
of the history of man. For centuries corn has been a staple
of everyday life, serving as a source of food, energy and
currency. Early Indians migrated from Eastern Asia through
North America to what is now South America and used corn
plants for everything from making clothes to making a
primitive beer from its chewed kernels. For thousands of
years, maize crops have been cultivated by the Mayans and
Incas to today's advanced hybrids resistant to pests and
chemicals, corn remains firmly rooted at the heart of
agriculture. Corn is thought to be the second most
cultivated plant throughout the history of man behind wheat.
As
an exchange traded commodity and future contract, corn
futures is one of the two originals and is also the most
liquid of the grain future contracts. Cotton began trading
in New York at about the same time that
corn futures
began trading in Chicago in the mid 1800's. The original
corn futures or forward contract was for 3000 bushels
instead of the 5000 bushel contract of today. Back then the
exchange membership fees were $3 instead of the 6 and 7
figure costs for exchange seats today. The Chicago Board of
Trade is the premiere corn future trading exchange in the
world today.
The corn market's role in the production
of ethanol has increased its demand because of the high
prices for petroleum products. Many experts agree that if
crude oil prices stay above $45/barrel it is economically
feasible for ethanol to be produced and added to unleaded
gasoline.
Corn has many different uses and many
different products are made from corn that many people are
unaware of: antibiotics, aspirin, laminated building
products, lubricating agents, metal plating, adhesives,
construction materials and even cardboard. These diverse
applications for corn make the corn futures and corn options
market that much more important to the corn industry. Many
savvy farmers use the corn futures and corn options markets
to hedge their crops against adverse price movements.
Corn Future Contract
Specifications
Corn Futures
Size
- 5,000 bushels
Tick Size
- $0.025/bu
Daily
Price Limit
- $0.20/bu
Strike
Price
- N/A
Contract
Months
- Dec, Mar, May, Jul, Sep
Last
Trading Day
- Seventh business day proceeding the last business day of
the delivery month
Expiration
Day
- N/A
Trading
Hours
- 9:30a.m. - 1:15p.m. (verify with exchange)
Ticker
Symbol
- C
Corn Options
Size
- One CBOT Corn Futures
Tick Size
- 1/8c/bu
Daily
Price Limit
- $0.20/bu
Strike
Price
- $0.10/bu
Contract
Months
- Dec, Mar, May, Jul, Sep
Last
Trading Day
- Last Friday proceeding the first notice day of the
corresponding futures contract by at least five business
days.
Expiration
Day
- Unexercised options expire at 10 a.m. on the first
Saturday following the last trading day.
Trading
Hours
- 9:30 a.m. - 1:15 p.m. (verify with exchange)
Corn Future Contract
Specifications
Corn Futures
Size
- 5,000 bushels
Tick Size
- $0.025/bu
Daily
Price Limit
- $0.20/bu
Strike
Price
- N/A
Contract
Months
- Dec, Mar, May, Jul, Sep
Last
Trading Day
- Seventh business day proceeding the last business day of
the delivery month
Expiration
Day
- N/A
Trading
Hours
- 9:30a.m. - 1:15p.m. (verify with exchange)
Ticker
Symbol
- C
Corn Options
Size
- One CBOT Corn Futures
Tick Size
- 1/8c/bu
Daily
Price Limit
- $0.20/bu
Strike
Price
- $0.10/bu
Contract
Months
- Dec, Mar, May, Jul, Sep
Last
Trading Day
- Last Friday proceeding the first notice day of the
corresponding futures contract by at least five business
days.
Expiration
Day
- Unexercised options expire at 10 a.m. on the first
Saturday following the last trading day.
Trading
Hours
- 9:30 a.m. - 1:15 p.m. (verify with exchange)
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