Coal futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of coal (eg. 1550 tons) at a predetermined price on a future delivery date.
You can trade Coal futures at New York Mercantile Exchange (NYMEX).
NYMEX Coal futures prices are quoted in dollars and cents per ton and are traded in lot sizes of 1550 tons .
|Exchange & Product Name||Symbol||Contract Size||Initial Margin|
|NYMEX Coal Futures||QL||1550 tons|
(Full Contract Spec)
|USD 18,900 (approx. 16%)|
(Latest Margin Info)
Consumers and producers of coal can manage coal price risk by purchasing and selling coal futures. Coal producers can employ a short hedge to lock in a selling price for the coal they produce while businesses that require coal can utilize a long hedge to secure a purchase price for the commodity they need.
Coal futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable coal price movement. Speculators buy coal futures when they believe that coal prices will go up. Conversely, they will sell coal futures when they think that coal prices will fall.