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Platinum and Palladium Futures and Options Education
Platinum Futures and Palladium Futures
Trading Facts
Platinum and palladium are both very important metals for a
multitude of industrial and personal uses. The New York
Mercantile exchange is the world's premiere exchange dealing
in these two very important metal future contracts.
Platinum futures
and palladium futures
trading have become more popular over the last several
years. Platinum and palladium are the most widely used of
the six platinum group metals (PGM); the group also includes
rhodium, ruthenium, osmium, and iridium. They are especially
valued for their catalytic functions, their conductivity,
and their resistance to corrosion. They are essential in key
manufacturing processes in the automobile, chemical,
petroleum refining, pharmaceutical, and electronics
industries.
During the September 11 terrorist attacks the NYMEX was
destroyed but within days the
platinum futures and
palladium futures
markets were trading again. This is a testament to the
strength and reliability of the metals future markets.
Platinum is the principal metal of the
six-metal group that bears its name; the other platinum
group metals are palladium, rhodium, ruthenium, osmium, and
iridium. All possess unique chemical and physical qualities
that make them vital industrial materials.
Jewelry creates the largest demand for
platinum, accounting for 51%. Automotive catalysts take 29%
and chemical and petroleum refining catalysts, 13%.
Platinum is used in the computer
industry and in other high-tech electronic applications
since it is an excellent conductor of electricity, does not
corrode, and has a low reactivity with other metals. This
sector accounts for about 7% of consumption.
Platinum is among the world's scarcest
metals; new mine production totals approximately only 5
million troy ounces a year. In contrast, gold mine
production runs approximately 82 million ounces a year, and
silver production is approximately 547 million ounces.
Supplies of platinum are concentrated in
South Africa, which accounts for approximately 80% of
supply; Russia, 11%; and North America, 6%.
NYMEX Division Platinum
Futures and Options
Trading
Unit
Platinum
Futures:
50 troy
ounces.
Options:
One
NYMEX Division platinum futures contract.
Trading
Hours
Platinum
Futures and Options:
8:20A.M.
To 1:05P.M., for the open outcry session.
Trading
Months
Platinum
Futures:
Trading is
conducted over 15 months beginning with the current month
and the next two consecutive months before moving into the
quarterly cycle of January, April, July, and October.
Options:
Trading is conducted in the nearest three contiguous
calendars contract months, plus the next two months of the
quarterly cycle of January, April, July, and October.
Price
Quotation
Platinum
Futures and Options:
Dollars
and cents per troy ounce. For example: $425.20 per troy
ounce.
Minimum
Price Fluctuation
Platinum
Futures and Options:
Price changes are in multiples of $0.10 per troy ounce, $5
per contract.
Maximum
Daily Limit
Platinum
Futures:
$25 per troy ounce ($1,250 per contract). There is no
maximum daily limit during the current delivery month and
the three business days preceding it.
Options:
No Price Limit
Last
Trading Day
Platinum
Futures:
Trading terminates at the close of business on the fourth
business day prior to the end of the delivery month.
Options:
Second Friday of the month prior to the delivery month of
the futures contract traded.
Options
Strike Price Intervals
Strike prices are in increments of $10
per troy ounce. At least seven strike prices are listed at
all times.
Exchange of Futures for Physicals (EFP)
The buyer or seller in a cash market
transaction may exchange a futures position for a physical
position of approximately equal quantity. EFPs may be used
to either initiate or liquidate a futures position.
Grade and Quality Specifications
In fulfillment of each contract, the
seller must deliver 50 troy ounces (±7%) of platinum not
less than .9995 fineness, with no single piece weighing less
than 10 ounces. Each contract unit may consist of ingots or
plates, each incised with the lot or bar number, weight,
grade, name, or logo of the assayer, and symbol identifying
the metal.
Margin Requirements
Margins are required for open futures
positions.
Trading Symbol
PL
NYMEX Division Palladium
Futures
Palladium is the
other major metal of the platinum group. It is mined with
platinum, and resembles it in many respects, yet there are
important differences between the two metals. Palladium is
also produced as a by-product of nickel mining. Russia
supplies about 67% of production, South Africa, 23%; and
North America, 8%. Annual production runs approximately 8.1
million ounces.
Automotive
catalysts are the largest consuming sector, accounting for
63% of demand. Electronic equipment accounts for 21%; dental
alloys, 12%; and jewelry, 4%.
Trading
Unit
100 troy ounces
Trading
Hours
8:30A.M. to 1:00P.M. New York time.
Trading
Months
Trading is normally conducted over 15
months beginning with the current month and the next two
consecutive months before moving into the quarterly cycle of
March, June, September, and December.
Price
Quotation
Dollars and cents per troy ounce. For
example: $98.85 per troy ounce
Minimum
Price Fluctuation
Price changes are in multiples of $0.05
per troy ounce ($5 per contract).
Maximum
Daily Limit
$6 per troy ounce ($600 per contract).
There is no maximum daily limit during the current delivery
month and the three business days preceding it.
Delivery Period
Delivery notice may be given by the
seller to the Exchange on the last business day preceding
the delivery month or any subsequent business day up to the
third business day prior to the end of the delivery month.
The basis of delivery is the settlement price on the day the
delivery notice is issued.
Exchange of Futures for Physicals (EFP)
The buyer or seller in a cash market
transaction may exchange a futures position for a physical
position of approximately equal quantity. EFPs may be used
to initiate or terminate a futures position.
Margin Requirements
Margins are required for open futures
positions.
Trading Symbol
PA
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