Choose to Trade Corn Futures
🏭Sponsor of todays Business Series posts🏭 🌽 1. Choose to Trade Corn Futures You decide to trade corn on a futures exchange like the CME Group . Each corn futures contract represents 5,000 bushels of corn. 📥 2. Post Margin (Not Full Price) You don’t buy 5,000 bushels upfront—you post a margin (performance deposit), say $2,000–$4,000 . Corn is trading at $5.00 per bushel , so the full contract is worth $25,000 , but your upfront commitment is much lower. 🔼 3. You Go Long (Buy Futures) You expect corn prices to rise , so you buy a futures contract at $5.00/bushel . This is your entry price . You’re now “long” corn. 📈 4. Market Moves in Your Favor Suppose corn rises to $5.20 per bushel . Since each penny = $50 on a 5,000-bushel contract: 20 c e n t s × 5 , 000 = $ 1 , 000 profit 20 cents \times 5,000 = \$1,000 \text{ profit} 20 ce n t s × 5 , 000 = $1 , 000 profit This gain is credited to your account daily via mark-to-market settlement. 🔄 5. Clos...