# How to Hedge Copper 24/7

> A practical guide to copper hedges for holdings, inventory, and future purchases: choose the right direction, match the benchmark, and manage margin around the clock.

- Canonical: https://www.liquid.trade/learn/how-to-hedge-copper-24-7
- Published: 2026-09-18
- Category: Strategy
- Tags: Copper, COPPER, Hedging, Perpetuals, 24/7 Trading

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**To hedge copper 24/7, short a copper perpetual against inventory or an investment you own. Go long to hedge a future purchase against rising costs.** Liquid's [COPPER market](https://app.liquid.trade/trade/xyz:COPPER) lets you adjust either position at night and on weekends.

Match the hedge to the quantity, price benchmark, and date of your exposure, then choose how much collateral to put behind it.

## Who might use a copper hedge?

A copper investor, a merchant holding unsold inventory, and a manufacturer buying copper next month face different price risks. [CME's base-metals hedging guide](https://www.cmegroup.com/education/courses/introduction-to-base-metals/how-to-manage-base-metals-risk-management-and-hedging) illustrates the distinction between a seller and a buyer whose purchase price has not yet been fixed.

| Situation | Main copper price risk | Potential direction |
| --- | --- | --- |
| Copper-linked investment | Falling investment value | Short |
| Inventory awaiting a sale at a future market price | Lower sale proceeds | Short |
| Unpriced future copper purchase | Higher input costs | Long |
| Purchase already fixed in price | Exposure depends on resale or other obligations | Recalculate before adding a hedge |

## What must match between the holding and the contract?

First, confirm **units**. Copper prices may be expressed per pound or per metric tonne. Use the same units for the holding and the order so you hedge the right quantity.

Second, check the **benchmark and delivery terms**. Physical cathodes, scrap, and processed products can trade at different premiums or discounts. Regional markets, freight, tariffs, and quality can affect the price you actually receive or pay.

Third, check **currency**. A USD copper hedge does not automatically remove the currency risk of a business that accounts or invoices in another currency. [CME's copper and FX example](https://www.cmegroup.com/education/articles-and-reports/fx-markets-drive-increased-hedging-opportunities-in-copper-trades.html) treats metal price risk and currency risk as separate exposures.

Finally, check the **price reference and timing**. If the perp refers to futures prices, understand which contracts it follows and how that reference changes. A purchase three months away need not move identically to the reference traded today.

## How do you calculate a copper hedge size?

For a close match, estimate **copper price exposure × target hedge percentage**. This gives target notional, not the margin deposit. When the contract and physical exposure differ, the required hedge ratio needs a separate analysis of how their prices move together.

Consider a hypothetical holding with 10,000 pounds of benchmark copper exposure. At an illustrative $5 per pound, its benchmark value is $50,000. A 40% hedge corresponds to $20,000 of short exposure, or 4,000 pounds if the contract's units support that interpretation.

| Matched price move | Holding's change | $20,000 short PnL | Combined change |
| --- | --- | --- | --- |
| $5 to $4.50, down 10% | −$5,000 | +$2,000 | −$3,000 |
| $5 to $5.50, up 10% | +$5,000 | −$2,000 | +$3,000 |

The example assumes both legs follow the same benchmark and the short survives. It excludes fees, funding, slippage, and physical premiums. A 100% matched hedge would aim to offset both the price decline and the price increase; keeping all the upside is not part of that structure.

For a manufacturer with an unpriced purchase, reverse the derivative direction. A long can gain as the purchase becomes more expensive, but it loses if the purchase becomes cheaper. Confirm the expected quantity: hedging metal you no longer need creates an outright position.

## What does 24/7 copper hedging mean?

You can adjust a copper perp while physical copper markets are closed. [trade[XYZ]'s perpetual markets](https://docs.trade.xyz/) provide this around-the-clock access.

During a weekend, the perp can react before the price on your supplier's invoice changes. The difference is basis risk. When reference markets reopen, prices can adjust quickly, so a weekend trade is not a guaranteed lock on the next physical purchase price.

Check weekend spreads and liquidity, and keep collateral accessible for any margin needs while your bank or supplier is closed.

## Can a copper hedge be liquidated?

Yes. A short loses margin when copper rises even if your inventory becomes more valuable. A long loses margin when copper falls even if your expected procurement cost improves. Gains outside the derivative account do not automatically support it.

<Callout variant="warn" title="Inventory is not automatically margin">
A warehouse holding, supplier credit, or gain in a brokerage account is separate from the collateral supporting a Liquid perpetual. Plan for adverse price moves and the timing of cash flows. Liquidation can remove the hedge while the underlying business exposure continues.
</Callout>

Compare [cross and isolated margin](/learn/cross-margin-vs-isolated-margin) before choosing how collateral is shared. Other positions can affect available collateral in cross margin; isolated margin has its own position-specific limit.

Funding is another cash flow to budget. Check the current sign, interval, and notional basis. A short can pay funding, and a long can receive it; the direction changes with the rate. See [Liquid's funding explanation](https://docs.liquid.trade/trading/funding-rates).

## How do you hedge copper on Liquid?

1. Identify the quantity, benchmark, currency, and date of the exposure.
2. Decide whether rising or falling copper prices hurt it and choose the corresponding hedge direction.
3. Review [Copper on Liquid](/markets/copper), then open the [COPPER order ticket](https://app.liquid.trade/trade/xyz:COPPER).
4. Confirm the contract units and reference. Translate the target notional into the ticket's size convention.
5. Set collateral and review funding, execution fees, spread, and estimated liquidation price before confirming.
6. Adjust or close the position when the purchase, sale, or investment exposure changes.

If an exit order closes only the derivative, the original exposure remains. A [stop loss](/learn/what-is-a-stop-loss) is not guaranteed to execute at its trigger price, so include slippage and loss of hedge coverage in the plan.

[Read the oil hedging guide →](/learn/how-to-hedge-oil-24-7) · [Review copper on Liquid →](/markets/copper)