How much does a cotton futures contract cost?

A speculator enters into two short cotton futures contracts, when the futures price is $1.20 per pound. The contract entails the delivery of 50,000 pounds of cotton. The initial margin is $7,000 per contract and the maintenance margin is $5,250 per contract. The settlement price on the day of the transaction is $1.50 per pound.

What is the price limit for cotton futures?

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 ( Click here for Cotton Rules.pdf) US Origin only. Galveston, TX, Houston, TX, Dallas/Ft. Worth, TX, Memphis, TN and Greenville/Spartanburg, SC.

What's going on with cotton futures?

Cotton futures posted limit gains out through July ’23 on Friday. A dramatic cut to the US production number by NASS helped to push things higher. They will have expanded limits of 5 cents on Monday. USDA’s Crop Production report showed an increase to US abandonment, with harvested acres at 7.13 million, down 1.42 million from last month.