ICE Cotton No. 2

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The ICE U.S. Cotton No. 2 contract is the benchmark contract for the global cotton trading community. The contract prices physical delivery of US-grown, exchange-grade product with grading performed by the U.S. Department of Agriculture, in store in exchange licensed warehouses in any of five US locations.

ICE Cotton No. 2 futures and options trade both by open outcry and by electronic trading on the ICE platform.

Uses

Uses for cotton include textiles, home furnishings, and other industrial uses such as medical supplies.

U.S. textile mills presently consume approximately 7.6 million bales of cotton a year. Eventually, about 57% of it is converted into apparel, more than a third into home furnishings and the remainder into industrial products.[1]

Data Quotes

ICE offers data quotes on a subscription basis.[2]

Contract Specifications

Cotton No. 2 Futures
Trading Screen Product Name Cotton No. 2 Futures
Trading Screen Hub Name NYCC
Contract Symbol CT
Contract Size 50,000 pounds net weight
Quotation Cents and hundredths of a cent per pound
Contract Series March, May, July, October, December
Minimum Price Fluctuation 1/100 of a cent (one "point") per pound equivalent to $5.00 per contract.
Settlement Physical Delivery
Daily Price Limit Futures contracts are subject to a daily price limit that can range from 3 to 7 cents per pound. Please consult Rule 10.09 for details[3]
Deliverable Origins Mexico, Salvador, Guatemala, Costa Rica, Nicaragua, Kenya, Papua New Guinea, Panama, Tanzania, Uganda, Honduras, and Peru all at par, Colombia at 400 point premium, Burundi, Rwanda, Venezuela and India at 100 point discount, Dominican Republic and Ecuador at 400 point discount, and Brazil at 600 point discount.
Delivery Locations Exchange licensed warehouse in the Ports of New York District, Virginia, New Orleans, Houston, Miami, Bremen/Hamburg, Antwerp and Barcelona.

The New York and Virginia delivery points are par; the New Orleans, Miami and Houston delivery points are at a discount of 0.50 cents per pound; and the Bremen/Hamburg, Antwerp and Barcelona delivery points are at a discount of 1.25 cents per pound.

Grade/Standards/Quality Quality : Strict Low Middling Staple Length: 1 2/32nd inc
First Notice Day Five business days before the first delivery day of the spot contract month, which is the first business day of that month.
Last Trading Day Seventeen business days from end of spot month.
Last Notice Day Twelve business days from end of spot month.
Position Limit Position Limit and Position Accountability information for all IFUS products can be found here.[4]
Markers TAS (Trade at Settlement)[5]
MIC Code IFUS
Clearing Venues ICUS
Trading Hours CITY TRADING PRE-OPEN
NEW YORK 4:15 AM - 1:30 PM

04:15 - 13:30

8:00 PM

20:00

LONDON 9:15 AM - 6:30 PM

09:15 - 18:30

1:00 AM

01:00

SINGAPORE 5:15 PM - 2:30 AM

17:15 - 02:30

9:00 AM

09:00

**In addition to the Pre-Open start time shown above, there will be a Post-Close Pre-Open order entry session from 2:00 pm to 6:00 pm NY time on the prior Exchange business day.
Codes Clearing Admin Name Coffee C
Physical KC
Logical KC
GMI (FC) 43
ION A.C.N. 2065
Cotton No. 2 Options
Trading Screen Product Name Cotton No. 2 Futures
Trading Screen Hub Name NYCC
Contract Symbol CT
Contract Size 50,000 pounds net weight
Price Quotation Cents and hundredths of a cent per pound
Contract Series Regular Options: March, May, July, October and December; Serial Options: January, September and November. The underlying future for the September and November serial options is the December futures contract; the underlying future for the January serial option is the March futures contract
Minimum Price Fluctuation 1/100 of a cent (one 'point') per pound
Daily Price Limit Cotton Options trading may be halted under certain market conditions. See Rule 10.53 for details.
Strike Price Intervals 1-cent increments for all contract months.
First Trading Day Business day following the listing of the underlying future.
Last Trading Day For Regular Options: Last Friday preceding the first notice day for the underlying futures by at least 5 business days

For Serial Options: Third Friday of the month in which the option expires.

Position Limit Position Limit and Position Accountability information for all IFUS products can be found here.[6]
MIC Code IFUS
Clearing Venues ICUS
Trading Hours CITY TRADING PRE-OPEN
NEW YORK 9:00 PM - 2:20 PM*

21:00 - 14:20

7:30 PM

19:30

LONDON 2:00 AM - 7:20 PM*

02:00 - 19:20

12:30 AM

00:30

SINGAPORE 10:00 AM - 3:20 AM*

10:00 - 03:20

8:30 AM

08:30

*Next Day
Codes Clearing Admin Name Cotton No 2
Physical CT
Logical CT
GMI (FC) 28
ION A.C.N. 2205
Weekly Cotton No. 2 Options
Trading Screen Product Name Cotton No. 2 Weekly
Trading Screen Hub Name NYCC
Contract Size One Cotton No. 2 futures contract
Tick Size .01 cent per lb., equivalent to $5.00 per contract
Strike Price Intervals 1-cent per lb./100 point increments
Exercise American style. Exercise of a Weekly Option will result in creation of a position in the underlying Cotton No. 2 future contract.
Trading Hours ETS: 9:00 pm to 2:30 pm NY time

Floor: 10:30 am to 2:15 pm NY time

Expiration Date Weekly Options expire on the Last Trading Day of the contract.
Last Trading Day A specified Friday that is not also the last trade date of a monthly option contract. If such a Friday is the last trade date of a monthly option, then the Weekly Option that would expire on that Friday will not be listed for trading.
First Trading Day Three Weekly Options will be listed at all times. A new Weekly Option will be listed on the business day following the last trade date of any Weekly Option.
Contract Symbol CTW

The Contract Symbol shown above will be used for weekly options listed on and after September 8, 2014. For information on the symbols used prior to that date please go to IFUS_Weekly_Options_FAQ.[7]

Underlying Contract The first listed future contract for which the monthly option on the future contract has not yet expired, with the proviso that the October futures contract is not eligible to be the underlying future on a Weekly Cotton No. 2 Option contract.
MIC Code IFUS
Clearing Venues ICUS
Trading Hours CITY TRADING PRE-OPEN
NEW YORK 9:00 PM - 2:20 PM*

21:00 - 14:20

7:30 PM

19:30

LONDON 2:00 AM - 7:20 PM*

02:00 - 19:20

12:30 AM

00:30

SINGAPORE 10:00 AM - 3:20 AM

10:00 - 03:20

8:30 AM

08:30

*Next Day
Codes Clearing Admin Name O-Cotton No 2
Physical CTW
Logical CTW
GMI (FC) CW
ION A.C.N. None
Cotton No. 2 1-Month Calendar Spread Options
Trading Screen Product Name Cotton No. 2 1-Month CSO
Trading Screen Hub Name NYCC
Contract Symbol CT1 (1 Month Series)

Determining the two futures months in an CSO pair requires knowing both the Contract Symbol and the Month Symbol. CSO contract symbols are three characters long, with the first two characters denoting the futures contract for the pair and the third digit signifying how to identify the second month in the pair, which must be implied using the Month Symbol for the CSO contract. For example, the Contract Symbol “CT1” indicates the underlying contract is Cotton No. 2, and that the second month in the spread pair is ONE month forward from the front month of the pair. If the Month Symbol for an CSO contract is K10 (or May 2010), the Contract Symbol “CT1” implies that the second month in the pair is N10 (or July 2010) – one contract month forward from the K10; the Contract Symbol “CT2” would imply that the second month in the pair is V10 (or Oct 2010) – two contract months forward from the K10.

Contract Size A spread position between the two futures contract months.
Price Quotation Cents and hundredths of a cent per pound
Contract Series March, May, July, October and December.

1 Month Series: each of the first four listed futures months paired with consecutive listed months

Minimum Price Fluctuation 1/100 of a cent (one ‘point’) per pound
Daily Price Limit None
Strike Price Intervals 25 point increments.
First Trading Day See Cotton Rule No. 10.71 for details.
Last Trading Day Each OFS contract expires on the last trading day of the regular option on the earlier of the two contract months in the spread pair; for example, all OFS contracts for which the March 2011 future is the front month of the pair will expire on the ltd of the March 2011 regular option.
Call Option Buyer of an CSO Call Option has the right to establish a spread position of long the first month in the spread pair and short the second month in the pair, at a price difference equal to the Strike Price of the CSO contract.
Put Option Buyer of an CSO Put Option has the right to establish a spread position of short the first month in the spread pair and long the second month in the pair, at a price difference equal to the Strike Price of the CSO contract.
Strike Price The Strike Price of an CSO contract can be positive (indicating the price of the front month is above the price of the back month in the pair), negative (indicating the price of the front month is below the price of the back month in the pair) or zero (indicating the prices of the two months in the pair are the same).
MIC Code IFUS
Clearing Venues ICUS
Trading Hours CITY TRADING PRE-OPEN
NEW YORK 9:00 PM - 2:30 PM*

21:00 - 14:30

8:00 PM

20:00

LONDON 2:00 AM - 7:30 PM*

02:00 - 19:30

1:00 AM

01:00

SINGAPORE 10:00 AM - 3:30 AM*

10:00 - 03:30

9:00 AM

09:00

Codes Clearing Admin Name O-Cotton No 2
Physical CT1
Logical CT1
GMI (FC) 8A
ION A.C.N. None
Cotton No. 2 2-Month Calendar Spread Options
Trading Screen Product Name Cotton No. 2 2-Month CSO
Trading Screen Hub Name NYCC
Contract Symbol CT2 (2 Month Series)

Determining the two futures months in an CSO pair requires knowing both the Contract Symbol and the Month Symbol. CSO contract symbols are three characters long, with the first two characters denoting the futures contract for the pair and the third digit signifying how to identify the second month in the pair, which must be implied using the Month Symbol for the CSO contract. For example, the Contract Symbol “CT1” indicates the underlying contract is Cotton No. 2, and that the second month in the spread pair is ONE month forward from the front month of the pair. If the Month Symbol for an CSO contract is K10 (or May 2010), the Contract Symbol “CT1” implies that the second month in the pair is N10 (or July 2010) – one contract month forward from the K10; the Contract Symbol “CT2” would imply that the second month in the pair is V10 (or Oct 2010) – two contract months forward from the K10.

Contract Size A spread position between the two futures contract months.
Price Quotation Cents and hundredths of a cent per pound
Contract Series March, May, July, October and December.

2 Month Series: each of the first three listed futures months paired with the 2nd listed month forward from that month.

Minimum Price Fluctuation 1/100 of a cent (one ‘point’) per pound
Daily Price Limit None
Strike Price Intervals 25 point increments.
First Trading Day See Cotton Rule No. 10.71 for details.
Last Trading Day Each OFS contract expires on the last trading day of the regular option on the earlier of the two contract months in the spread pair; for example, all OFS contracts for which the March 2011 future is the front month of the pair will expire on the ltd of the March 2011 regular option.
Call Option Buyer of an CSO Call Option has the right to establish a spread position of long the first month in the spread pair and short the second month in the pair, at a price difference equal to the Strike Price of the CSO contract.
Put Option Buyer of an CSO Put Option has the right to establish a spread position of short the first month in the spread pair and long the second month in the pair, at a price difference equal to the Strike Price of the CSO contract.
Strike Price The Strike Price of an CSO contract can be positive (indicating the price of the front month is above the price of the back month in the pair), negative (indicating the price of the front month is below the price of the back month in the pair) or zero (indicating the prices of the two months in the pair are the same).
MIC Code IFUS
Clearing Venues ICUS
Trading Hours CITY TRADING PRE-OPEN
NEW YORK 9:00 PM - 2:30 PM*

21:00 - 14:30

8:00 PM

20:00

LONDON 2:00 AM - 7:30 PM*

02:00 - 19:30

1:00 AM

01:00

SINGAPORE 10:00 AM - 3:30 AM*

10:00 - 03:30

9:00 AM

09:00

*Next Day
Codes Clearing Admin Name Cotton No 2
Physical CT2
Logical CT2
GMI (FC) 8B
ION A.C.N. None

References

  1. Cotton's Major Uses. Cotton.org.
  2. The most valuable commodity is information. ICE.
  3. Cotton Rulebook. {{{org}}}.
  4. Position Limit and Position Accountability Information. {{{org}}}.
  5. TAS. {{{org}}}.
  6. Position Limit and Position Accountability Information. {{{org}}}.
  7. ICE Weekly Option Contracts. {{{org}}}.

Resources

ICE Cotton No. 2 Product Spec

ICE Weekly Cotton No. 2 Product Spec

ICE Cotton No. 2 1-Month Calendar Spread Product Spec

ICE Cotton No. 2 2-Month Calendar Spread Product Spec

Last modified on 15 January 2021, at 15:07