Copper

Copper Futures

Normal Daily Settlement Procedure

Copper futures (HG) are settled by CME Group staff based on trading activity on CME Globex during the settlement period. The settlement period is defined as: 12:59:00 to 13:00:00 ET for the active month and 12:30:00 to 13:00:00 ET for calendar spreads.

Active Month

The active month is the nearest of the contract months listed below that is not the spot month. The active month becomes a non-active month effective on its First Position Date.

Tier 1:   The active contract month settles to the volume-weighted average price (VWAP) of the trades executed on CME Globex between 12:59:00 and 13:00:00 ET, the settlement period, rounded to the nearest tradable tick. 

Tier 2:   If there is no VWAP, then the last trade price is checked against the bid/ask.

1. 1. If the last trade price is outside of the bid/ask spread, then the contract settles to the nearest bid or ask price.
   2. If the last trade price is within the bid/ask spread or if a bid/ask is not available, then the contract settles to the last trade price.

Tier 3:   If there is no last trade price available, then the prior settle is checked against the bid/ask.

1. 1. f the prior settle is outside of the bid/ask spread, then the contract settles to the nearest bid or ask price.
   2. If the prior settle is within the bid/ask spread or if a bid/ask is not available, then the contract settles to the prior settlement price.

All Other Months

All months other than the designated active month will settle per the following guidelines:

Tier 1:  All months other than the designated active month will settle based upon the VWAP of accumulated calendar spread transactions between 12:30:00 - 13:00:00 ET, the calendar spread settlement period.  These calendar spreads will be used in conjunction with settlements from any months where a settlement price has been determined to form a VWAP in in the contract month to be settled.  For examples please click here.

Tier 2: In the absence of relevant calendar spread trades, bid/asks in those calendar spreads will be used in conjunction with settlements from any months where a settlement price has been determined to form an implied market in the contract month to be settled. These implied markets will be used to derive the best possible bid and the best possible ask. Provided the implied bid/ask spread is consistent with reasonability thresholds as determined by the Global Command Center (GCC), the contract will settle within the implied bid/ask spread. Note- Efforts will be made to honor resting bids and asks, but VWAP trades will take precedence.

Tier 3: In the absence of an implied bid/ask that meets reasonability thresholds, the net change of the previous contract month will be applied to determine the contract month’s settlement price.

Final Settlement Calculation for Expiring Contract

CME Group staff determines the settlement of the expiring Copper futures (HG) contract by following the regular daily settlement procedures for non-active months. The expiring contract, considered to be a non-active month, is settled based on relevant spread relationships on CME Globex throughout the 30 minute settlement period (for Deferred Months) up to expiration.

Additional Details

Copper (HG) futures are physically delivered upon expiration. For additional details on delivery, please see the COMEX Rulebook (Chapter 111):

http://www.cmegroup.com/rulebook/NYMEX/1a/111.pdf

E-Mini Copper Futures

Normal Daily Settlement Procedure

The settlements in the E-mini Copper futures (QC) are derived directly from the settlements of the full-sized Copper futures (HG) contracts, rounded to the nearest tradable tick.

Settlement prices for the E-mini Copper futures (QC) may differ slightly from the "true" settlement price displayed on CME Group’s Daily Bulletin. These slight variances in settlements are the result of rounding due to differences in the minimum tick sizes between the E-mini Copper futures (QC) and the full-sized contracts. Additionally, the settlement price displayed on the CME Group’s Daily Bulletin matches that of the full-sized Copper futures (HG) for purposes of marking-to-market, as the contracts are off-settable. The E-mini Copper futures (QC) trade in .002 increments and the full-size Copper futures (HG) trade in .0005 increments.

For Example:

If the HGX2 settles 3.6965, then the QCX2 would settle 3.6960.

Final Settlement

CME Group staff determines the settlement of the expiring E-Mini Copper futures (QC) contract by following the regular daily settlement procedure.

Additional Details

E-Mini Copper (QC) futures are cash settled upon expiration. For additional details, please see the COMEX Rulebook (Rule 913.07).

Micro Copper Futures

Normal Daily Settlement Procedure

Micro Copper futures (MHG) daily settlements are equal to the daily settlement price of the Copper futures (HG). 

Copper Financial Futures

Normal Daily Settlement Procedure

Copper Financial futures (HGS) are settled by CME Group staff based on the Copper physically delivered
futures (HG) daily settlement prices. Each day the settlement price in the look-a-like HG contract is used
in the derivation of the HGS settlements. Since the HG contracts expire on the third last business day of
the month and the HGS contracts expire on the last business day of the month there are always two
settlement prices from the next deferred HG futures contract in the derivation of the HGS settlement.
Specifically, the Floating Price for each contract month is equal to the arithmetic average of the COMEX
Copper futures first nearby contract settlement price for each business day that it is determined during the
contract month rounded to the nearest $0.0001 per pound.

Additional Details

Copper Financial Futures (HGS) are financially settled upon expiration. For additional details on delivery,
please see the COMEX Rulebook (Chapter 1190):

https://www.cmegroup.com/content/dam/cmegroup/rulebook/COMEX/11/1190.pdf