CME Group, one of the world’s paramount derivatives marketplaces, has announced that it will offer a new Precious Metals Spot Spread to enable customers to effectively manage spot-futures spread price risk.
The Spot Spread will be facilitated by the introduction of London Spot Gold futures and London Spot Silver futures contracts, and will provide traders with transparent, real-time information on the price relationship between COMEX futures and London spot markets. The new contracts will be listed on COMEX and will begin trading on 9 January 2017, subject to regulatory review.
Our new contracts will provide traders with streamlined access to the London spot market.
Miguel Vias, CME Group Head of Precious Metals, commented: “The introduction of the Spot Spread will enable customers to efficiently and electronically manage the risk they have between our deeply liquid COMEX Gold and Silver futures and the London spot markets. Our new contracts will provide traders with streamlined access to the London spot market via the safety and transparency of cleared, exchange-traded futures contracts.”
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The new inter-commodity spread trade market will be established on CME Globex between the London Spot Gold and Silver futures contracts and the active month of the COMEX Gold and Silver futures. The Precious Metals Spot Spread will enable participants to transfer risk in one simple, cost-effective transaction executed electronically on CME Globex and cleared by CME Clearing.
Expanding Suite of COMEX Precious Metals Contracts
The new contracts behind the Spot Spread will expand CME Group’s suite of COMEX precious metals contracts, while adding to the three new contracts – Gold/Silver Ratio futures, Gold/Platinum Spread futures and Platinum/Palladium Spread futures – which began trading on 24 October 2016, as reported by Finance Magnates.
They will also provide customers with exposure to the London spot market by creating two-day futures contracts that will result in delivery of unallocated London gold or silver.
Both London Spot Gold futures and London Spot Silver futures will be physically settled and listed for normal trading on CME Globex and for submission of block trades and exchange for related positions (EFRP) via CME ClearPort.
London Spot Gold futures contract will represent 100 troy ounces of unallocated gold, and each London Spot Silver futures contract will be equivalent to 5,000 troy ounces of unallocated silver.