The word “platinum” is derived from the Spanish word platina meaning silver. Platinum is a relatively rare, chemically inert metallic element that is more valuable than gold. Platinum is a grayish-white metal that has a high fusing point, is malleable and ductile, and has a high electrical resistance. Chemically, platinum is relatively inert and resists attack by air, water, single acids, and ordinary reagents. Platinum is the most important of the six-metal group, which also includes ruthenium, rhodium, palladium, osmium, and iridium.
Platinum is one of the world’s rarest metals with new mine production totaling only about 5 million troy ounces a year. All the platinum mined to date would fit in the average-size living room. Platinum is mined all over the world with supplies concentrated in South Africa. South Africa accounts for nearly 80% of world supply, followed by Russia, and North America.
Because platinum will never tarnish, lose its rich white luster, or even wear down after many years, it is prized by the jewelry industry. The international jewelry industry is the largest consumer sector for platinum, accounting for 51% of total platinum demand. In Europe and the U.S., the normal purity of platinum is 95%. Ten tons of ore must be mined and a five-month process is needed to produce one ounce of pure platinum.
The second major consumer sector for platinum is for auto catalysts, with 21% of total platinum demand. Catalysts in autos are used to convert most of vehicle emissions into less harmful carbon dioxide, nitrogen, and water vapor. Platinum is also used in the production of hard disk drive coatings, fiber optic cables, infrared detectors, fertilizers, explosives, petrol additives, platinum-tipped spark plugs, glassmaking equipment, biodegradable elements for household detergents, dental restorations, and in anti-cancer drugs.
The Platinum futures contract trades on Globex, the CME Group electronic exchange after it acquired the New York Mercantile Exchange (NYMEX) and Commodity Exchange, Inc (COMEX) in 2008. The market trades Sunday through Friday from 5:00 PM CT to 4:00 PM CT the following day.
One Platinum futures contract is 50 troy ounces. The most common contract symbol is PL.
The futures contract price increment or “tick” is $.10 per troy ounce. A one “tick” move is $5. Therefore, a full dollar move, 996.0 to 997.0, for example, is $50.
The performance bond or initial margin requirement to initiate one futures contract is $2,090 (as of November 11, 2015). To control that futures contract going forward the maintenance margin becomes $1,900 (as of November 11, 2015).
The Platinum futures contract month listings are over 15 months beginning with the current month and the next two calendar months before moving into the quarterly cycle of January (F), April (J), July (N), and October (V).
The Platinum futures contract terminates trading on the third last business day of the delivery month. The October 2015 Platinum futures contract LTD is October 28, 2015 for example.
The Platinum futures contract is deliverable.
This particular market trades virtually around the clock (including while the European markets are trading from roughly 2:00 AM CT to 10:30 AM CT and Asian markets are trading from roughly 5:00 PM CT to 2:00 AM CT) and is susceptible to outside markets and fundamental influences.
Visit www.danielstrading.com for additional contract specifications and market information regarding the Platinum futures market.
Sources:
www.cmegroup.com
www.barchart.com
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