ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Trading Sugar Futures

Updated on August 16, 2010

Trading Sugar Futures

If you’ve ever thought about trading sugar futures or about learning the sugar market in general, let me tell you that there’s plenty of profits to be made in sugar, but you have to understand the factors that drive price, and you have to understand where the price of sugar is in the overall scheme of its price history. This is the only way to really determine (at any time) whether or not sugar is a “bargain”, or whether you’re entering in near the top range of sugar’s historical price. The only way to accurately ascertain this type of information is by studying sugar’s historical price charts, which are available on a myriad of websites out there today, one of the first coming to mind being BarChart.com (one of my personal favorites). But before I get too far ahead of myself, let me back up and basically “introduce” sugar futures to anyone who may not be fully familiar with this particular commodity’s specifications. Sugar trades on the ICE (Intercontinental Exchange), and its contract symbol is SB. It’s actually called Sugar # 11, and although I have been trading since 2001, I still don’t know what the “11” stands for. According to ICE’s own website, Sugar # 11 is “the world’s benchmark contract for raw sugar trading”. Basically, whatever happens in Sugar #11 trading will trickle down to the lesser-talked-about sugar derivatives. One contract of Sugar # 11 represents 112,000 pounds of sugar—a whale of a lot of sweetness.

Image courtesy of Google Images
Image courtesy of Google Images

Sugar Futures Trading

The price of sugar is quoted in hundredths of a cent per pound, with one hundredth of a cent equaling $11.20. What this means is that if sugar’s price goes from 9.35 to 9.36, you have just gained $11.20 if you were long (or lost $11.20 if you were short). Sugar is considered to be in the “Softs” category of commodities, along with cotton, orange juice, coffee, etc. What you have to remember is that no matter what type of commodity you’re trading, there’s a great degree of risk that comes along with the leverage that futures trading affords. You can learn how to manage that risk and make huge profits from the markets, or you can be ignorant, or arrogant, or uninformed, or emotional, or whatever else does not equate to sound trading practices, and you will see your trading account decimated in what will seem like the blink of an eye. The futures market has humbled many a man (and woman) who felt that he/she was financially invincible. The sugar market is no different…you have to learn how to manage your downside risk by using reasonable protective stop-loss orders once you’ve put on a position, by making sure that you are not under-capitalized when trying to trade sugar futures, and by even possibly using options for protection. Some people believe that using an option for protection is a waste of money, but I look at it as an “insurance contract” in case the market does not move in your favor. Every solid and profitable trader understands that losses are a part of the game, so in my mind I always go back to the famous saying I once heard: “If you learn how to manage the downside, the upside will take care of itself”. Trading sugar futures is no different than trading any other commodity in that respect; you can actually trade practically any market successfully if you learn how to practice solid overall trading principles. Discipline, non-emotionalism, and a sound money management strategy can take you a long way in the markets, so be sure to really do your homework before entering the fray of the futures market.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)