Copper Trading: Copper Trading Tips and Strategies
- Copper[1] is a highly tradeable commodity.
- Copper[2] is priced in US Dollars[3]; so the price of the dollar affects the price of copper[4].
- Copper is gaining more traction as an investment option along with various other alternatives.
- As looked at in our primer for copper[5], copper prices tend to do well when emerging markets are growing as demand derives from building and construction.
- Trading strategies for copper can include both technical and fundamental analysis.
Copper is a global commodity that has several key uses throughout industry and is highly correlated to economic growth. Copper trading is often used by hedgers and speculators as protection or exploitation of future price movements. Both individuals and institutions are able to gain exposure to copper and copper trading, making this metal popular choice within the commodity trading spectrum.
Why Trade Copper and How Does Copper Trading Work?
One advantage of copper trading is accessibility. Copper[6] is traded through a variety of avenues like futures, options, equities and CFDs. You can also gain exposure to copper via copper ETFs (exchange traded funds) like CPER (United States Copper Index Fund) or JJCB (iPath Series B Bloomberg Copper Subindex Total Return ETN).
Copper is a soft malleable metal with properties like gold[7] and silver[8]. It derives most of its demand from building construction, transportation equipment and electronic products. It is a strong conductor of electricity and heat, and therefore has a wide range of industrial uses which also leads it to trade in high volumes - a good thing for traders because it can lead to reduced spreads[9] and potentially cleaner chart patterns.
