Cotton is hot. Oh, I know, cotton isn’t usually thought of as producing clothing that’s necessarily warm. But cotton is hot in this sense: its price is about to take a big drop, and that makes for a major opportunity for commodities traders.
In the wholesale (commodities) market, cotton costs about 44 cents per pound. We think that, over the next few months, the price of cotton will decline to at least 38 cents per pound.
That doesn’t sound like much, but the secret is in the numbers. In the cotton market, each one cent rise or fall in the price of cotton is worth $500; which means that if cotton falls from 44 cents per pound to 38 cents, each contract is worth $3,000.
Anyone can learn how to trade commodities such as cotton without risking a nickel – by “paper-trading” until it becomes second nature to you.
www.candlewave.com
