CME Group, one of the world’s paramount derivatives marketplaces, has announced the launch of the first ever, exchange-traded precious metals spread and ratio futures contracts.
The three new contracts include Gold/Silver Ratio futures, Gold/Platinum Spread futures and Platinum/Palladium Spread futures and will begin trading on Monday, 24 October 2016, subject to regulatory review.
The new contracts, which follow last month’s launch of Weekly Equity Index Options on Futures, will provide market participants with a new way of managing precious metals price relationships, while accessing the deep liquidity offered by COMEX Gold and Silver, and NYMEX Platinum and Palladium futures.
The three new futures contracts will eliminate a great deal of complexity involved in price ratio and spread trading of precious metals.
Miguel Vias, CME Group Head of Precious Metals, said: “The introduction of these ratio and spread futures contracts respond directly to customer demand for new tools to more effectively manage the price relationships of our precious metals futures contracts, which are often used to manage portfolio risk. These three new futures contracts will eliminate a great deal of complexity involved in price ratio and spread trading of precious metals and provide a broader subset of market participants the tools to offset macroeconomic risk.”
Liquidity Constraints in 2021 – What is the Best Path Forward?Go to article >>
Increasing Product Range
The contracts will be financially settled and build on CME Group’s existing suite of precious benchmark precious metals products.
Gold/Silver Ratio futures will be 500 index points in size and reference the ratio of the COMEX Gold and Silver futures price for each day of the contract month.
Gold/Platinum Spread futures will be 100 troy ounces in size and reference the difference between the COMEX Gold and NYMEX Platinum futures price for each business day of the contract month.
Finally, Platinum/Palladium Spread futures will be 100 troy ounces in size and reference the difference between the NYMEX Platinum and Palladium futures price for each business day of the contract month.
Commencing with the December 2016 contract month, all three contracts will be available for trading electronically via CME Globex, as well as submission for clearing through CME ClearPort.
Gold/Silver Ratio futures and Gold/Platinum Spread futures contracts will be listed by and subject to the rules of COMEX. Platinum/Palladium Spread futures will be listed by and subject to the rules of NYMEX.