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Platinum Futures Trading Basics
Platinum futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of platinum (eg. 50 troy ounces) at a predetermined price on a future delivery date.
Some Facts about Platinum
Platinum is a very rare, heavy, ductile, grey-white metal which has a very high melting point. It is also extremely resistant to corrosion and an excellent electrical conductor. Platinum's role as a catalyst is also the reason that makes it such an important industrial metal. [Click here to learn more the various uses of Platinum...]
Platinum Futures Exchanges
You can trade Platinum futures at New York Mercantile Exchange (NYMEX) and Tokyo Commodity Exchange (TOCOM).
NYMEX Platinum futures prices are quoted in dollars and cents per ounce and are traded in lot sizes of 50 troy ounces .
TOCOM Platinum 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 Platinum Futures (Price Quotes) | PL | 50 troy ounces (Full Contract Spec) | USD 8,100 (approx. 17%) (Latest Margin Info) |
| TOCOM Platinum Futures (Price Quotes) | - | 500 grams (Full Contract Spec) | JPY 150,000 (approx. 11%) (Latest Margin Info) |
Platinum Futures Trading
Consumers and producers of platinum can manage platinum price risk by purchasing and selling platinum futures. Platinum producers can employ a short hedge to lock in a selling price for the platinum they produce while businesses that require platinum can utilize a long hedge to secure a purchase price for the commodity they need.
Platinum 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 platinum price movement. Speculators buy platinum futures when they believe that platinum prices will go up. Conversely, they will sell platinum futures when they think that platinum prices will fall.
Related Articles
- Buying Platinum Futures to Profit from a Rise in Platinum Prices
- Selling Platinum Futures to Profit from a Fall in Platinum Prices
- Platinum Options Basics
- Platinum Call Option Trading Basics
- Platinum Put Option Trading Basics
- Hedging Against Rising Platinum Prices with Platinum Futures
- Hedging Against Falling Platinum Prices with Platinum Futures
How to Start Trading Platinum Futures
To buy or sell platinum 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.
