coffee question?

Discussion in 'Ag Futures' started by trading_time, May 14, 2006.

  1. I went to:

    http://www.nybot.com/

    For information on coffee and am a little confused. (also is this the official exchange coffee trades on?)

    Minimum Price movement
    5/100 cent/lb., equivalent to $18.75 per contract.

    Does the above mean that for ever .20 cent tick (or .05?) = $18.75?

    Also is the tick the same as the spread, or may the spread at times occur to be several ticks?

    Many Thanks.

    trading_time....
     
  2. (1) The tick size means that the market can trade: 103.00, 103.05, 103.10, 103.15, 103.20, 103.25 et al. (2) That's what it means to have price fluctuations, i.e. "ticks", of 5/100ths of a penny. (3) The contract size of 37,500 pounds per contract multiplied by the tick size produces the $18.75-per-tick value. (4) The bid-ask spread for a particular contract in the market can vary depending on conditions. (5) If you're going to trade coffee, start out with deeper pockets. Summer months can be rocky and wild.