
Points vs. Cents.
Grains:
Wheat, corn, soybeans, and oats, the price is
quoted in dollars and cents for both futures and options. For
example, a price quote of 4.09 1/2 is actually 4 dollars 9 and 1/2
cents per bushel. These grains all move in 1/4 cent
increments, which is $12.50 of real money. Profit or loss of
1 cent = $50.00
Soybean
Meal is quoted in dollars (and cents)
per ton (100 ton contract). When you see a price of 180.50, it
means one hundred eighty dollars and fifty cents per ton. When
you see a change of .30 it means 30 cents per ton, though often
referred to as 30 points. In this case you'd be up or down
$30 on the day. The mini contract is exactly half of the regular
bean meal contract and therefore attractive to trade because it is
not too diluted.
Bean
Oil is quoted in dollars
and cents per 100 pounds. When you see 2650 it is actually
twentysix dollars and fifty cents per 100 pounds of bean oil.
When you see a change of +.09, it actually means 9 cents per 100
pounds, but is commonly stated as nine points. One point equals six
dollars, so a nine point move would mean a difference of $54
dollars. Options are quoted in
points.
Meats:
Are quoted in cents per pound. There
are one hundred points to a cent, each point being worth $4 except
in Feeder Cattle, where each point is worth $5. So, a full
cent move is worth $400, unless it's feeder cattle which would be
$500. If you see a price of 57.25 this is in fact fiftyseven
cents and twentyfive one hundredths of a cent (25/100 of one
cent). The decimal point is not meant to be a divider between
dollars and cents. This guideline also works for
options. The premium may be 3.70, the easy way to figure out
the dollar value is to drop the decimal and multiply by the point
value, so 370 on a cattle option would be 370 times $4 per point =
$1480.
Foods or
"Softs"
Coffee, Orange Juice, and Sugar are all
quoted in cents per pound. This means you can use the same methods
you used to figure out the meats. Cocoa is a little different,
it is quoted in even dollar amounts per ton. When you see a price of
1612, it actually means one thousand sixhundred twelve dollars per
ton. There are ten tons in a contract, so if you see a change
of +21 per ton, multiply by ten, or add 0 to get a real dollar value
change of $210.00. Options are the same, just add a 0 to the
premium price to give you the cost of the
option.
Metals:
Gold, Platinum, and
Palladium are just as they appear with regards to how dollars and
cents usually appear. The numbers to the left of the decimal
point are dollars, and the numbers to right of decimal point point
are cents. Here, points are the same as cents. If you
hear that palladium dropped 85 cents (the 100 oz palladium contract
yields $1 per point for an actual cash gain or loss of $85.00. per
contract)
Silver is more like the grains such as corn or
wheat. One penny move equals a cash value of $50.00. In
the paper, you often see it quoted as 599.5, with a change of 5.5.
This actually means that an ounce of silver is worth $5.99
1/2 dollars, down 5 1/2 cents. Silver can settle on one tenth
of a cent but it only trades every half cent. Silver options,
however, do trade in one tenth increments, so you can be very
precise in buying a silver option.
Copper is quoted in cents per pound, instead of
cents per ounce. It is a 25,000 pound contract, so if each
pound increased in value by one penny, you'd have 25000 pennies,
which is equal to $250 dollars. One point is one one hundredth
of that, or $2.50. So if copper goes up 30 points, you figure
by multiplying 30 times $2.50 = $75.00. Options are quoted in
points, so a 215 point option is worth 215 times $2.50 which equals
$537.5.
Energies:
Crude oil is quoted in dollars
per barrel (bbl). A price of 14.50 is fourteen dollars and
fifty cents per barrel. Each contract has 1000 barrels, so a
price movement from 14.50 to 14.51 is worth ten bucks per
contract.
Heating Oil and Unleaded Gas are quoted in cents
per gallon, just like at the gas pump. The contract size is
42,000 gallons, so each point is worth $4.20. A move from 5200
to 5205 is worth 5 times $4.20, or $21 dollars. Options are
quoted in points, so an option going for 85 points is worth 85 times
$4.20, or $357 dollars.
Natural Gas is quoted in BTU's, or British Thermal
Units, which is a measurement of heat. Each notch this
contract moves is worth $10, which is one
point.
Woods and Fibers:
Cotton is quoted in cents
per pound, with 50,000 pounds in a contract. It's just like copper,
except twice as big, so each point is worth $5.00. Lumber
traded in 80000 board feet, each point is worth eighty cents,
the minimum fluctuation is 10 points, or $8.00 ( I try to stay a
little confused about lumber so I won't be tempted to trade it, it's
liquid and volatile).
Currencies:
The exchange quotes dollar based
currency futures in "American Terms" which is the dollar price of
of each foreign currency. For example $.6500 per one
Swiss Franc. Another way to think about is, how much of our currency
does it take to buy one of theirs, sixty five cents buys one Swiss
Franc. To figure profit or loss, drop the decimal point and
multiply the point change by the point value in dollars. For
example $.6500 to .6465 is 35 points times $12.5 per point which
equals
$437.50.
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