Raw materials: Trading cotton with binary options (part 1)

raw-materials-trading-cotton-binary-optionsWe earlier discussed copper, a raw material available to trade with binary options. The BinaryOptionsInvesting team now presents another raw material available for speculation: cotton.

Cotton is a raw material currently in vogue with traders. It represents almost 40% of fibers used in the textile industry and is also the most widely used material in the world. You can invest in cotton as a particularly profitable underlying asset, so here is some advice to help you better understand it.

Where is cotton produced? The main cotton producing countries are China, the US, India and Pakistan. China is the largest producer, supplying almost a quarter of worldwide demand. For this reason, cotton’s stock price is directly related to, and influenced by, Chinese production in correlation to imports to and exports from this country.

Where is cotton traded?
Cotton is found on several financial markets, such as the New York Board of Trade (NYBOT.) The American market is regulated – prices paid to American producers are subsidized and higher than international prices. In fact, the subsidies are numerous but are slated to be reduced as of 2013.

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