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Palladium Futures Trading Basics
Palladium futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of palladium (eg. 100 troy ounces) at a predetermined price on a future delivery date.
Some Facts about Palladium
Palladium is a hard, silver-white metal which is usually found alloyed with other metals of the platinum group in platinum ores. Like platinum, palladium has excellent catalytics properties and are often used as catalyst, such as in catalytic converters on automobiles. [Click here to learn about the main uses of Palladium...]
Palladium Futures Exchanges
You can trade Palladium futures at New York Mercantile Exchange (NYMEX) and Tokyo Commodity Exchange (TOCOM).
NYMEX Palladium futures prices are quoted in dollars and cents per ounce and are traded in lot sizes of 100 troy ounces .
TOCOM Palladium futures are traded in units of 500 grams (16.08 troy ounces) and contract prices are quoted in yen per gram.
| Exchange & Product Name | Symbol | Contract Size | Initial Margin |
| NYMEX Palladium Futures (Price Quotes) | PA | 100 troy ounces (Full Contract Spec) | USD 2,750 (approx. 15%) (Latest Margin Info) |
| TOCOM Palladium Futures (Price Quotes) | - | 500 grams (Full Contract Spec) | JPY 60,000 (approx. 23%) (Latest Margin Info) |
Palladium Futures Trading
Consumers and producers of palladium can manage palladium price risk by purchasing and selling palladium futures. Palladium producers can employ a short hedge to lock in a selling price for the palladium they produce while businesses that require palladium can utilize a long hedge to secure a purchase price for the commodity they need.
Palladium futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable palladium price movement. Speculators buy palladium futures when they believe that palladium prices will go up. Conversely, they will sell palladium futures when they think that palladium prices will fall.
Related Articles
- Buying Palladium Futures to Profit from a Rise in Palladium Prices
- Selling Palladium Futures to Profit from a Fall in Palladium Prices
- Hedging Against Rising Palladium Prices with Palladium Futures
- Hedging Against Falling Palladium Prices with Palladium Futures
How to Start Trading Palladium Futures
To buy or sell palladium futures, you need to open a trading account with a broker that handles futures trades. Most online brokerages out there only deal with stocks and stock options. Only a few such as optionsXpress lets you trade futures and futures options as well. optionsXpress also provide a virtual trading platform where beginners can try out futures and options trading in real market conditions without using real money.
