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Trading Sugar with Binary Options

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Of the commodities listed for binary options trading, the least popular is Sugar futures. It is one asset that may appear as not widely sought-after; however, sugar is heavily traded by industrial companies. Private traders are no stranger to trading sugar as well, especially since their number is slowly increasing through the years.

History of Sugar Consumption

Sugar was thought to have been first used in the exotic islands of Polynesia. Traders plying the route brought it to India where Indians found a way to crystalize sugar. The Arabs found a way to perfect the process, soon establishing sugar plantations as far back as the fourth century. Europeans then discovered its importance in human consumptions as well as for commercial use, the Spanish cultivating sugar cane in the West Indies as early as the year 1506.

Sugar plantations thrive in countries with tropical climates, with sugar being derived from sugar beet and sugar cane. Major counties that export the commodity are Australia, Brazil, China and India. In terms of supply abundance, great quantities come from the Caribbean nations, the United States, Latin America and the Far East.

Trading Sugar in the Modern Times

Our sugar consumption has gone a long way since its early usage by the aristocrats in Europe. Now on the average, we consume at least 150 pounds of sugar per year. Occurring naturally and is artificially present in food and drinks, what was once considered as rare and expensive, can now be accessed by the average consumer.

The development of sugar mills and refineries has also completely changed the way sugar is traded across the globe. The “white gold”, as it is also referred to, is always in high demand from food manufacturers.

Why Trade Sugar with Binary Options

The nature of sugar prices are usually determined by industrial corporations, and often changes drastically amidst a volatile market. It is also impacted by the demand for ethanol, as sugar is not only a food additive but also is a fuel additive used to produce ethanol. Note that sugar prices may increase in response to rising gasoline prices. Binary traders should take heed of related news and recent geo-political situations in countries that figure a pivotal role in sugar production.

This seasonality of sugar prices can be used by traders as an advantage when opening binary positions. In the summer, investors can take note of low sugar prices because of extended production.
Trading sugar futures in the options market provides a hedging vehicle for bakers, candy manufacturers, exporters, producers, refiners and trade houses. Commercial Hedgers can protect themselves against a slide in the price of the commodity by following its price development, while small and large traders can profit from the price fluctuations of the sugar process.

The sugar commodity as part of trading with binary options is usually quoted in the cents per pounds method, with the ticker symbol ‘SB’. Sugar trading hours is from 12:00 to 17:30 at the New York Board of trade (NYBOT).