Cotton Futures Margin & Contract Specifications

What is Cotton?

Cotton is a natural fiber material mainly used in textiles, clothing, and household fabrics, making it one of the most important agricultural cash crops worldwide.
In the international market, cotton is highly tradable and subject to significant price fluctuations, which makes it widely used for trade and risk hedging.
Global cotton production is concentrated in China, India, Brazil, and the United States. However, in terms of exports, Brazil, the U.S., and Australia dominate. China and India export very little; in fact, due to insufficient domestic supply, they often import cotton instead.
The primary futures market for cotton is the Intercontinental Exchange in New York, where the Cotton No. 2 contract (symbol: CT, also known as U.S. Cotton) is traded.

Functions and Features of Cotton Futures (CT)

Investors can participate in the rise or fall of international cotton prices through cotton futures, making it suitable for both bullish and bearish trading strategies.

Cotton prices are closely linked to weather conditions, agricultural output, global demand from the apparel industry, and the import/export policies of China, India, and the U.S. It is a typical commodity driven by supply and demand fundamentals.

Cotton futures also serve as a hedging tool for businesses, helping textile mills, importers and exporters, and fashion brands lock in costs or profits, thereby reducing risks from price volatility.

Exchange

Intercontinental Exchange U.S. (ICE US)

Key Factors Affecting Cotton Futures (CT)

Weather and Output

Cotton is a seasonal crop, and climate factors such as drought, floods, and hurricanes directly impact production.
Particularly in the southern U.S. (Texas, Mississippi) and India’s planting regions, natural disasters can trigger sharp price volatility.

Global Apparel and Textile Demand

The apparel industry is the largest end-user of cotton. When global economic growth and consumer spending rise, cotton demand increases.
Conversely, when international fashion brands cut orders, cotton prices come under pressure.

U.S. Dollar Index and Commodity Trends

Cotton is priced in U.S. dollars. A stronger dollar typically weighs on commodity prices, while a weaker dollar tends to attract buying interest.
Cotton prices are also influenced by the broader agricultural market (such as soybeans and corn) and general commodity market sentiment.

Cotton Margin

How much money is needed to trade futures? At the beginning, the required margin is the initial margin. While holding a position, the margin after deducting floating profits and losses must remain above the maintenance margin; otherwise, a margin call will be issued. For day-trading margin, only half of the margin is required, provided the position is closed before the market closes.

Foreign Futures

Cotton Contract Specifications

Here is a summary for traders of the contract specifications, exchange, trading hours, minimum price fluctuation, and available trading months for CottonFutures.

CottonLast Trading Day

Futures