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Platinum - Palladium Futures and Options Trading
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. These metals posses' unique chemical and physical qualities that make them vital industrial materials. 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. Platinum is also increasingly being used by the jewelry industry as designers are taking advantage of its durability and luster to create striking pieces.
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%
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.
Palladium is very similar to platinum and is part of the same general metals group. Palladium is mined with platinum, but it is somewhat more common because it is also a by-product of nickel mining. Automotive catalysts are the largest consuming sector, accounting for 63% of demand. Electronic equipment accounts for 21%; dental alloys, 12%; and jewelry, 4%
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Platinum / Palladium Commodity Contract Specifications
Platinum Futures and Options
Trading Specs
Futures: 50 troy ounces.
Options: One NYMEX Division platinum futures contract.
Trading Hours
Futures and Options: 8:20A.M. To 2:30P.M., for the open outcry session.
Trading Months
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
Futures and Options: Dollars and cents per troy ounce. For example: $425.20 per troy ounce.
Minimum Price Fluctuation
Futures and Options: Price changes are in multiples of $0.10 per troy ounce, $5 per contract.
Maximum Daily Limit
Futures: $25 per troy ounce ($1,250 per contract). There is no maximum daily commodity trading limit during the current delivery month and the three business days preceding it. If the settlement price reaches the maximum daily limit for two consecutive days in any of the outer months, the expanded daily limit schedule will go into effect. The maximum expanded daily limit is $50 per troy ounce ($2,500 per contract).
Options: No Price Limit
Last Trading Day
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.
Exercise of Options
By a clearing member to the clearinghouse no later than 5:30P.M., or 45 minutes after the underlying futures settlement price is posted, whichever is later, on any day up to and including the option's expiration.
Options Strike Price Intervals
Strike prices are in increments of $10 per troy ounce. At least seven strike prices are listed at all times.
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.
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.
Packaging
Platinum may be delivered in packaged or unpackaged form. If packaged, the package must be sealed by an Exchange-approved assayer or producer of an approved brand so that it cannot be opened without destroying the seal. The package must bear the lot or bar number, weight, grade, name, or logo of the assayer or approved brand mark, and the symbol of the metal.
Inspection
Inspection must be made by an Exchange-approved assayer. Assay certificates are valid provided the metal covered is thereby passed directly from the assayer to an Exchange-approved depository by means of an Exchange-approved carrier.
Position Accountability Levels and Limits
Any one month/all months: 1,500 net futures, but not to exceed 200 contracts from the beginning of the business day prior to the first notice day for any delivery month.
Trading Symbol
PL
Palladium Futures
Trading Unit
100 troy ounces
Trading Hours
8:10A.M. to 2:20P.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. If the settlement price reaches the maximum daily limit in any one of the outer months, the expanded daily limit schedule will go into effect the next day. The maximum expanded daily limit is $12 per troy ounce ($1,200 per contract)
Last Trading Day
Trading terminates at the close of business on the third business day prior to the end of the delivery month.
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.
Grade and Quality Specifications
In fulfillment of each contract, the seller must deliver 100 troy ounces (±7%) of palladium 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.
Packaging
Palladium may be delivered in packaged or unpackaged form. If packaged, the package must be sealed by an Exchange-approved assayer or producer of an approved brand so that it cannot be opened without destroying the seal. The package must bear the lot or bar number, weight, grade, name, or logo of the assayer or approved brand mark, and the symbol of the metal. If there is more than one plate or ingot in the package, each plate or ingot must be incised with the lot or bar number and the weight.
Inspection
Inspection must be made by an Exchange-approved assayer. Assay certificates are valid provided the metal covered is passed directly from the assayer to an Exchange-approved depository by means of an Exchange-approved carrier.
Position Accountability Levels and Limits
625 contracts for all months combined or in any one month, but not to exceed 225 contracts from the beginning of the business day prior to the first notice day for any delivery month.
Trading Symbol
PA
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