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Platinum Futures

A platinum futures contract is a contract to buy or sell a specific weight of platinum at a designated time in future, at an agreed price defined at the time the contract is entered. 

Platinum futures contracts were originally designed to protect large industrial users of the precious metal from adverse price swings by enabling them to obtain or supply a steady quantity of platinum at established prices in order that their respective businesses will be able to make a profit. 

Members of the public buying platinum futures are usually speculators betting on the near term direction of the price of platinum. They will buy platinum futures when they believe that the price of the metal will rise and sell them when they think it will fall. Platinum futures traders don't actually have to own or take delivery of the physical metal. They can just pay (or receive) the valuation difference in cash on delivery date by selecting the cash settlement option upon entering the trade. 

As futures trading account typically provide significant leverage, the associated profit potential as well as the risk involved can be very high. As an example, purchasing platinum futures allow the investor to control $50000 worth of platinum by merely paying only $10000 upfront.

Investors are advised to exercise due caution if they wish to venture into this highly speculative way of playing the platinum market. The risk of trading platinum futures is very high, especially for those who are uninitiated in the intriques of options and futures trading. Less aggressive platinum investors are advised to stick to buying platinum ETFs or the stocks of platinum producers.

Platinum Futures Trading

Platinum futures are traded in futures exchanges worldwide. Below is a summary of platinum futures contracts traded in major futures exchanges worldwide.

Standard Platinum Futures Contracts

Exchange Symbol Contract Size Min. Price Fluctuation Initial Margin
New York Mercantile Exchange (NYMEX) PL 50 troy ounces US$0.10 (10¢) per troy ounce, equivalent to $5.00 per contract approx 20%,
subject to change.
(see full contract specs.)
Tokyo Commodities Exchange (TOCOM) Not Available 500 grams (approximately 16 troy ounces) JPY 1 per gram (500 japanese yen per contract) approx 12%,
subject to change.
(see full contract specs.)
Multi Commodity Exchange (MCX) PLATINUM 250 grams (approximately 8 troy ounces) 50 Paise per gram (Rs 125 per contract) approx 5%,
subject to change.
(see full contract specs.)

Platinum Mini-Futures

In recent years, platinum mini-futures contracts were introduced by some of the major futures exchanges to make platinum futures trading accessible to more people. The contract sizes of platinum mini-futures are lower than their standard counterparts and consequently, their margin requirements are lower, making them attractive to platinum futures traders who would like to speculate with less money.

Exchange Symbol Contract Size Min. Price Fluctuation Initial Margin
New York Mercantile Exchange (NYMEX) QR 500 grams US$0.01 (1¢) per gram, equivalent to $5.00 per contract approx 20%,
subject to change.
(see full contract specs.)
Tokyo Commodity Exchange (TOCOM) Not Available 100 grams (approximately 3.215 troy ounces) JPY 1 per gram (100 japanese yen per contract) approx 16%,
subject to change.
(see full contract specs.)

How to Start Trading Platinum Futures

To buy or sell platinum futures, you need to open a trading account with a broker that handles platinum futures trades. Most online brokerages out there only deal with stocks and stock options. Only a few such as TD Ameritrade lets you trade futures and futures options as well. TD Ameritrade also provide a virtual trading platform where beginners can try out futures and options trading in real market conditions without using real money.