Platinum Futures Trading Basics

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Platinum Futures Trading Basics

Platinum futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of platinum (eg. 50 troy ounces) at a predetermined price on a future delivery date.

Some Facts about Platinum

Platinum is a very rare, heavy, ductile, grey-white metal which has a very high melting point. It is also extremely resistant to corrosion and an excellent electrical conductor. Platinum’s role as a catalyst is also the reason that makes it such an important industrial metal. [Click here to learn more the various uses of Platinum. ]

Platinum Futures Exchanges

You can trade Platinum futures at New York Mercantile Exchange (NYMEX) and Tokyo Commodity Exchange (TOCOM).

NYMEX Platinum futures prices are quoted in dollars and cents per ounce and are traded in lot sizes of 50 troy ounces .

TOCOM Platinum futures are traded in units of 500 grams (16.08 troy ounces) and contract prices are quoted in yen per gram.

Exchange & Product Name Symbol Contract Size Initial Margin
NYMEX Platinum Futures
(Price Quotes)
PL 50 troy ounces
(Full Contract Spec)
USD 8,100 (approx. 17%)
(Latest Margin Info)
TOCOM Platinum Futures
(Price Quotes)
500 grams
(Full Contract Spec)
JPY 150,000 (approx. 11%)
(Latest Margin Info)

Platinum Futures Trading Basics

Consumers and producers of platinum can manage platinum price risk by purchasing and selling platinum futures. Platinum producers can employ a short hedge to lock in a selling price for the platinum they produce while businesses that require platinum can utilize a long hedge to secure a purchase price for the commodity they need.

Platinum futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable platinum price movement. Speculators buy platinum futures when they believe that platinum prices will go up. Conversely, they will sell platinum futures when they think that platinum prices will fall.

Learn More About Platinum Futures & Options Trading

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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. ]

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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 Basics

How many trading platforms are available?

Trader Platinum offers 4 trading platforms: MetaTrader 4: take advantage of one-click, at-best order execution, advanced technical analysis and unmatched automation capabilities.! Trader Platinum Mobile Trader: It’s powered by Android and iOS, a state-of-the-art platform developed using HTML 5. Mobile Trader is compatible with Smartphones that support HTML 5. and also it is optimized for tablets trading with fully synchronized with your MT4 account.

What are the recommended system requirements for using Trader Platinum trading platform?

The recommended PC requirements are: Computer: Intel Pentium IV 3.0GHz, 512 MB RAM, or higher Monitor: A minimum resolution of 800×600 pixels Operating system: Microsoft Windows XP, Windows 2000 Web browser: Microsoft Internet Explorer 6.X Internet connection: Broadband internet connection with a min 1.5 MB download speed Note: Systems that do not meet these requirements may experience limited functionality.

How do I open an account?

Designed with you in mind, opening a Trader Platinum account is easy. Simply click on the register button link and fill in the required information page. Once your account has been successfully created, you will need to send verification documents in order to complete the registration process. These can be emailed. As soon as your documents have been approved, you will be able to fund your account and begin trading.

What documents are required to open a Trader Platinum account?

“In order to activate your account the following documents are required:
An identifying document such as a passport, drivers license or official ID
Proof of Address such as a utility bill or bank statement (Must be no more then 6 months old)”

I have registered but can’t login to my account. What I should do?

After registering, you will receive a welcome email with a verification link. Please check your email and follow the link. If the verification link does not work, please try copying and pasting the link into your browser’s address bar. If this does not resolve the issue, please contact the Trader Platinum support team via chat or email at: [email protected]

If I choose to send wire transfers. Who should I send it to?

Trader Platinum works with many local banks. You can view a complete list of banks within welcome mail or your account area and choose whichever one is best-suited for you.

Which payment methods can I use to deposit funds into my account?

Trader Platinum accepts a wide variety of payment methods, such as: Credit/ Debit card (Visa, MasterCard or Diners Club), Fast Wire Transfer, Webmoney, Local Payment Methods, For a full list of payment methods please login to your account and go to the deposit page.

What security do I have when trading with Trader Platinum?

Trader Platinum works with many only regulated broker and your funds keep safe in most secured banks without any third party access.

When was Trader Platinum founded?

Trader Platinum was founded a decade ago by a group of professional forex traders, investment managers and software engineers.

How does Trader Platinum determine its pricing structure?

Trader Platinum works closely with major banks and financial institutions operating in the forex industry. By working with several leading banks, Trader Platinum is able to obtain the best Bid and Ask price on behalf of clients thru fast ECN pool. Working with top-tiered banks allows Trader Platinum to offer the most liquid, accurate, cost-effective and secure solutions for our customers.

What type of trading accounts does Trader Platinum offer?

Trader Platinum offers 4 types of trading accounts: Basic, Standard, Premium and Tailored. To learn more about account types, please visit the Account types page.

Understanding the Basics of How to Trade Futures

January 24, 2020 by Daniels Trading | Futures 101

Before mastering any discipline, everyone must first grasp the basics. Futures trading is no different. Gaining an understanding of terminology, order types, and platform functionality is required before you enter the market.

Fortunately, learning how to trade futures isn’t all that difficult. Vast educational resources are available online, and by taking a few simple steps, almost anyone can become an active futures trader.

Step 1: Know Your Terminology

Venturing into the futures marketplace is like taking a vacation to an exotic locale―the people speak a unique language, and it’s very easy to get confused. If you’re brand-new to futures, here are a few terms to understand before diving into the market:

  • Contract: A futures contract is an agreement to buy or sell a certain quantity of an underlying asset on a forthcoming date. The contract is the base unit by which futures are traded.
  • Margin: Futures products are traded on margin. This means that participants only need to put down a small percentage of each contract’s value to trade. Accordingly, a review of your broker’s margin requirements is necessary before actually trading.
  • Execution: Trade execution is the literal buying and selling of futures contracts on the open market. To execute a trade, an entry order is sent to the exchange, filled, and then closed out by an exit order.
  • Long: To take a long position in the market means to buy a contract(s). If you’re long the market, then you profit from bullish moves in asset pricing.
  • Short: To take a short position in the market means to sell a contract(s). If you’re short the market, then you profit from bearish moves in asset pricing.

If you want to learn how to trade futures, then starting with the industry nomenclature is the logical first step. Boosting your trading vocabulary will build solid communication skills useful for interacting with brokers and other traders.

Step 2: Understand Order Types

Ultimately, the job of a futures trader is to buy and sell contracts in the market. Good traders accomplish this feat regularly and make money in the process. One of the keys to their success is consistently using the right order type for the job.

In futures, you don’t simply buy or sell contracts indiscriminately. It’s necessary to designate a specific order type for each transaction. Here are a few of the most common:

  • Market: A market order is sent to the exchange immediately and is filled at the best available price. Market orders offer instant market entry or exit, ideal for momentum-based strategies.
  • Limit: Limit orders are placed at specific price points and are held at the exchange until elected. Sell limit orders are placed above price, whereas buy limit orders are placed below. Limits are frequently used as profit targets or for market entry in counter-trend trading plans.
  • Stop: Like limit orders, stops are placed at specific price points and rest at the exchange until hit. However, buy stops are placed above price, whereas sell stops are placed below. Stop orders offer the trader an immediate market exit upon being elected, thus mitigating potential liabilities.

If you are learning how to trade futures, it’s imperative that you not ignore order types. Using an ideal order type for each trade promotes precision, efficiency, and long-run profitability.

Step 3: Learn your platform

The contemporary futures marketplace is almost exclusively digital in nature. This means that traders conduct business online via software platforms. Although there are broker-assisted and managed futures options, the average retail participant relies on the platform to facilitate trade.

It’s a basic point, but learning how to trade futures depends greatly on understanding the software platform. To successfully deal with sudden pricing volatility and market turbulence, a trader needs to be fluent in chart navigation, the application of technical tools, and order placement. If they are not, trading competently in live market conditions is a daunting task.

Trying to Find a Great ‘How to Trade Futures’ Curriculum?

For more information on the basics of futures, look no further than the online education portal at Daniels Trading. Featuring a comprehensive library of webinars, trading guides, and expert blog articles, this educational suite is an indispensable resource for market newbies and veteran traders alike.

About Daniels Trading

Daniels Trading is an independent futures brokerage firm located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading is built on a culture of trust committed to the firm’s mission of Independence, Objectivity and Reliability.

Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

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