Selling (Going Short) Platinum Futures to Profit from a Fall in Platinum Prices

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

Contents

Selling (Going Short) Platinum Futures to Profit from a Fall in Platinum Prices

If you are bearish on platinum, you can profit from a fall in platinum price by taking up a short position in the platinum futures market. You can do so by selling (shorting) one or more platinum futures contracts at a futures exchange.

Example: Short Platinum Futures Trade

You decide to go short one near-month NYMEX Platinum Futures contract at the price of USD 964.00/oz. Since each Platinum futures contract represents 50 troy ounces of platinum, the value of the contract is USD 48,200. To enter the short futures position, you have to put up an initial margin of USD 8,100.

A week later, the price of platinum falls and correspondingly, the price of NYMEX Platinum futures drops to USD 867.60 per troy ounce. Each contract is now worth only USD 43,380. So by closing out your futures position now, you can exit your short position in Platinum Futures with a profit of USD 4,820.

Short Platinum Futures Strategy: Sell HIGH, Buy LOW
SELL 50 troy ounces of platinum at USD 964.00/oz USD 48,200
BUY 50 troy ounces of platinum at USD 867.60/oz USD 43,380
Profit USD 4,820
Investment (Initial Margin) USD 8,100
Return on Investment 60%

Margin Requirements & Leverage

In the examples shown above, although platinum prices have moved by only 10%, the ROI generated is 0%. This leverage is made possible by the relatively low margin (approximately 17%) required to control a large amount of platinum represented by each contract.

Leverage is a double edged weapon. The above examples only depict positive scenarios whereby the market is favorable towards you. If the market turn against you, you will be required to top up your account to meet the margin requirements in order for your futures position to remain open.

Learn More About Platinum Futures & Options Trading

You May Also Like

Continue Reading.

Buying Straddles into Earnings

Buying straddles is a great way to play earnings. Many a times, stock price gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected great results. [Read on. ]

Writing Puts to Purchase Stocks

If you are very bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options on the stock as a means to acquire it at a discount. [Read on. ]

What are Binary Options and How to Trade Them?

Also known as digital options, binary options belong to a special class of exotic options in which the option trader speculate purely on the direction of the underlying within a relatively short period of time. [Read on. ]

Investing in Growth Stocks using LEAPS® options

If you are investing the Peter Lynch style, trying to predict the next multi-bagger, then you would want to find out more about LEAPS® and why I consider them to be a great option for investing in the next Microsoft®. [Read on. ]

Effect of Dividends on Option Pricing

Cash dividends issued by stocks have big impact on their option prices. This is because the underlying stock price is expected to drop by the dividend amount on the ex-dividend date. [Read on. ]

Bull Call Spread: An Alternative to the Covered Call

As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less capital requirement. In place of holding the underlying stock in the covered call strategy, the alternative. [Read on. ]

Dividend Capture using Covered Calls

Some stocks pay generous dividends every quarter. You qualify for the dividend if you are holding on the shares before the ex-dividend date. [Read on. ]

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

Leverage using Calls, Not Margin Calls

To achieve higher returns in the stock market, besides doing more homework on the companies you wish to buy, it is often necessary to take on higher risk. A most common way to do that is to buy stocks on margin. [Read on. ]

Day Trading using Options

Day trading options can be a successful, profitable strategy but there are a couple of things you need to know before you use start using options for day trading. [Read on. ]

What is the Put Call Ratio and How to Use It

Learn about the put call ratio, the way it is derived and how it can be used as a contrarian indicator. [Read on. ]

Understanding Put-Call Parity

Put-call parity is an important principle in options pricing first identified by Hans Stoll in his paper, The Relation Between Put and Call Prices, in 1969. It states that the premium of a call option implies a certain fair price for the corresponding put option having the same strike price and expiration date, and vice versa. [Read on. ]

Understanding the Greeks

In options trading, you may notice the use of certain greek alphabets like delta or gamma when describing risks associated with various positions. They are known as “the greeks”. [Read on. ]

Valuing Common Stock using Discounted Cash Flow Analysis

Since the value of stock options depends on the price of the underlying stock, it is useful to calculate the fair value of the stock by using a technique known as discounted cash flow. [Read on. ]

Buying (Going Long) Platinum Futures to Profit from a Rise in Platinum Prices

If you are bullish on platinum, you can profit from a rise in platinum price by taking up a long position in the platinum futures market. You can do so by buying (going long) one or more platinum futures contracts at a futures exchange.

Example: Long Platinum Futures Trade

You decide to go long one near-month NYMEX Platinum Futures contract at the price of USD 964.00 per troy ounce. Since each NYMEX Platinum Futures contract represents 50 troy ounces of platinum, the value of the futures contract is USD 48,200. However, instead of paying the full value of the contract, you will only be required to deposit an initial margin of USD 8,100 to open the long futures position.

Assuming that a week later, the price of platinum rises and correspondingly, the price of platinum futures jumps to USD 1,060 per troy ounce. Each contract is now worth USD 53,020. So by selling your futures contract now, you can exit your long position in platinum futures with a profit of USD 4,820.

Long Platinum Futures Strategy: Buy LOW, Sell HIGH
BUY 50 troy ounces of platinum at USD 964.00/oz USD 48,200
SELL 50 troy ounces of platinum at USD 1,060/oz USD 53,020
Profit USD 4,820
Investment (Initial Margin) USD 8,100
Return on Investment 60%

Margin Requirements & Leverage

In the examples shown above, although platinum prices have moved by only 10%, the ROI generated is 60%. This leverage is made possible by the relatively low margin (approximately 17%) required to control a large amount of platinum represented by each contract.

Leverage is a double edged weapon. The above examples only depict positive scenarios whereby the market is favorable towards you. If the market turn against you, you will be required to top up your account to meet the margin requirements in order for your futures position to remain open.

Learn More About Platinum Futures & Options Trading

You May Also Like

Continue Reading.

Buying Straddles into Earnings

Buying straddles is a great way to play earnings. Many a times, stock price gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected great results. [Read on. ]

Writing Puts to Purchase Stocks

If you are very bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options on the stock as a means to acquire it at a discount. [Read on. ]

What are Binary Options and How to Trade Them?

Also known as digital options, binary options belong to a special class of exotic options in which the option trader speculate purely on the direction of the underlying within a relatively short period of time. [Read on. ]

Investing in Growth Stocks using LEAPS® options

If you are investing the Peter Lynch style, trying to predict the next multi-bagger, then you would want to find out more about LEAPS® and why I consider them to be a great option for investing in the next Microsoft®. [Read on. ]

Effect of Dividends on Option Pricing

Cash dividends issued by stocks have big impact on their option prices. This is because the underlying stock price is expected to drop by the dividend amount on the ex-dividend date. [Read on. ]

Bull Call Spread: An Alternative to the Covered Call

As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less capital requirement. In place of holding the underlying stock in the covered call strategy, the alternative. [Read on. ]

Dividend Capture using Covered Calls

Some stocks pay generous dividends every quarter. You qualify for the dividend if you are holding on the shares before the ex-dividend date. [Read on. ]

Leverage using Calls, Not Margin Calls

To achieve higher returns in the stock market, besides doing more homework on the companies you wish to buy, it is often necessary to take on higher risk. A most common way to do that is to buy stocks on margin. [Read on. ]

Day Trading using Options

Day trading options can be a successful, profitable strategy but there are a couple of things you need to know before you use start using options for day trading. [Read on. ]

What is the Put Call Ratio and How to Use It

Learn about the put call ratio, the way it is derived and how it can be used as a contrarian indicator. [Read on. ]

Understanding Put-Call Parity

Put-call parity is an important principle in options pricing first identified by Hans Stoll in his paper, The Relation Between Put and Call Prices, in 1969. It states that the premium of a call option implies a certain fair price for the corresponding put option having the same strike price and expiration date, and vice versa. [Read on. ]

Understanding the Greeks

In options trading, you may notice the use of certain greek alphabets like delta or gamma when describing risks associated with various positions. They are known as “the greeks”. [Read on. ]

Valuing Common Stock using Discounted Cash Flow Analysis

Since the value of stock options depends on the price of the underlying stock, it is useful to calculate the fair value of the stock by using a technique known as discounted cash flow. [Read on. ]

Platinum Futures Trading

Get in-depth information about Platinum Futures including Price, Charts, Technical Analysis, News and more and links to metals futures quotes and charts.

Platinum Futures

Current Platinum Futures | Futures Prices

Platinum Futures Prices — Historical Chart

Chart of Platinum Futures futures updated March 14th, 2020. Click the chart to enlarge. Press ESC to close.

Disclaimer: This material is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

Platinum Futures Contract Specifications

CME Globex Product Symbol (Electronic Trading) PL Contract Size

The Seller shall deliver one Contract Unit of platinum, weighed to the nearest thousandth of a troy ounce, or the equivalent weight in grams, of homogeneous cast plate and/or ingot, with a weight tolerance of 7% either higher or lower. Each Contract Unit may consist of more than one piece of plate and/or ingot, with no individual piece weighing less than 10 troy ounces, or the equivalent weight in grams.

Grade and Quality Specifications

Platinum delivered under this contract shall be a minimum of 99.95% pure.

Price Quotation U.S. Dollars and Cents per troy ounce Venue CME Globex, CME ClearPort, Open Outcry CME Globex Hours (EST) MON 9:05 a.m. – FRI 1:55 p.m. Central Time Daily trading halts 4:00 p.m. – 5:00 p.m. Central Time CME ClearPort Sunday – Friday 6:00 p.m. – 5:15 p.m. (5:00 p.m. – 4:15 p.m. Chicago Time/CT) with a 45-minute break each day beginning at 5:15 p.m. (4:15 p.m. CT) Open Outcry Hours (EST) MON-FRI: 9:05 a.m. -1:00 p.m. Central Time Minimum Fluctuation Prices shall be quoted in dollars and cents per troy ounce. The minimum price fluctuation shall be $.10 per troy ounce. There shall be no maximum limit on price fluctuation. Packaging and Marking

(A) Platinum may be delivered in packaged or unpackaged form.

(B) If Platinum is delivered in packaged form, the Platinum shall be in a package sealed by an Approved Assayer or Approved Producer so that the package may not be opened without destruction of the seal. Each package shall contain exactly one Contract Unit of Platinum and must bear:

(1) the lot or identification number(s) of each ingot and/or plate contained therein;

(2) the actual weight of the platinum therein;

(3) the grade of the pieces therein;

(4) the name or logo of the Approved Assayer or mark of the Approved Brand; and

(5) the chemical symbol for Platinum, Pt and/or the word “Platinum”.

(C) If Platinum is delivered in unpackaged form, each piece of Platinum comprising the Contract Unit shall be incised with:

(1) the lot or identification number of such ingot and/or plate contained therein;

(2) its actual weight (provided that if the piece was previously sampled, the weight on the Assay

Certificate shall govern);

(3) the grade of such piece;

(4) the name or logo of the Approved Assayer or mark of the Approved Brand; and

(5) the chemical symbol for Platinum, Pt and/or the word “Platinum”.

Delivery Months

During each calendar month (the “current calendar month”), the Exchange will make available for trading contracts that provide for delivery of Platinum in the following months: 1) the current calendar month; 2) the first calendar month following the current calendar month; 3) the second calendar month following the current calendar month; and 4) each January, April, July and October during the period beginning with the first calendar month following the current calendar month through the 15th calendar month following the current calendar month.

Each Warrant shall contain the information set forth in the Assay Certificate, incised on the bar, or clearly identified on the package; provided, however, that weight shall be expressed in troy ounces. If the weight incised on the bar or set forth on the Assay Certificate is in grams, it shall be converted to troy ounces by dividing the weight in grams by 31.1035 and rounding to the nearest thousandth of a troy ounce. The Warrant shall represent that the Contract Unit:

(A) is an Approved Brand, meeting the grade and quality specifications of Rule 105.03, received directly from its Approved Producer by means of one or more Approved Carriers and/or, with respect to Platinum from the Approved Producer, by means of such Approved Producer’s own transport, or

(B) is an Approved Brand, meeting the grade and quality specifications of Rule 105.03, received directly from one or more storage vaults located in Zurich, Switzerland owned or controlled by either Credit Suisse Group or UBS AG, by means of one or more Approved Carriers. Such storage vaults are delivery locations for the London Platinum and Palladium Market. Upon request of the Licensed Depository, the Seller shall provide to the Licensed Depository a pro forma invoice and a bar list issued by either Credit Suisse Group or UBS AG (or the wholly-owned subsidiary that owns such vault), and, if so requested, the Licensed Depository is not required to issue a Warrant for any such Contract Unit until such documentation has been provided, or

(C) was received directly from an Approved Assayer or Approved Producer by means of one or more Approved Carriers and/or, with respect to Platinum from the Approved Producer, by means of such Approved Producer’s own transport, and was accompanied by an Assay Certificate(s) for each piece in the Contract Unit, or

(D) was received directly from an Approved Assayer or Approved Producer by means of one or more Approved Carriers and/or, with respect to Platinum from the Approved Producer, by means of such Approved Producer’s own transport, and was not accompanied by an Assay Certificate(s) for each piece in the Contract Unit but has been determined to be Eligible after having been inspected by an Approved Assayer or Approved Producer, or

(E) was received directly from another Licensed Depository by means of one or more Approved Carriers, provided, however, that the Platinum was previously Eligible, or

(F) was deposited at a Licensed Depository, and thereafter inspected by an Approved Assayer or Approved Producer and determined to be Eligible.

Inspection and Assay Certificate

(A) Assay Certificates. Except for Platinum delivered pursuant to Rules 105.08(A), (B), (C) or (E), the Licensed Depository shall, upon receipt of the commodity, cause an inspection to be made by an Approved Assayer or an Approved Producer. The Approved Assayer or Approved Producer shall issue Assay Certificate(s) covering each piece in the Contract Unit in the form approved by the Exchange.

(B) Each Assay Certificate shall report the lot or bar number, weight, grade, the name of the Approved Assayer or Approved Producer, the symbol identifying the metal or the name of the metal and the date of inspection. On all Assay Certificates, weight shall be expressed in troy ounces.

(C) (1) Every lot inspected must bear on the package the lot number, seal number, date of inspection, weight, grade, and the name of the Approved Assayer or Approved Producer who made the inspection. (Effective as to Platinum assayed prior to October 1, 1979.)

(2) Every lot inspected, if packaged, must bear on such package the lot or bar number; weight; grade; the name or logo of the Approved Assayer or Approved Producer and the symbol identifying the metal or the name of the metal. Every lot inspected, if unpackaged, must be incised with the lot or bar number, weight; grade; the name or logo of the Approved Assayer, and the symbol identifying the metal. (Effective as to Platinum assayed on and after October 1, 1979.)

(D) If a Contract Unit of Platinum is surrendered to the bearer of a Warrant, or if the Contract Unit is in a package and the seal is broken, the Assay Certificate(s) for such Contract Unit is no longer valid and such Contract Unit is no longer Eligible.

(E) The Seller shall bear the costs of inspection, delivery to the Licensed Depository, charges of the Licensed Depository, and all other expenses, if any, to determine that the Platinum is Eligible.

Delivery Type Delivery Period

Delivery may take place on any business day beginning on the first business day of the delivery month or any subsequent business day of the delivery month, but not later than the last business day of the current delivery month.

Listed Contracts

Trading is conducted over 15 months beginning with the current month and the next two calendar months before moving into the quarterly cycle of January, April, July, and October.

Termination of Trading

Trading terminates on the third last business day of the delivery month.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker!
    Perfect Choice For Beginners and Middle-Level Traders!
    Free Demo Account! Free Education!

  • Binomo
    Binomo

    Honest broker!

Like this post? Please share to your friends:
Binary Options Trading Step By Step
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: