Gold Futures and Gold Options Trading
Market
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Free Gold Futures trading E Guide
Dear clients and students of the commodity markets, the
following information should answer all of your questions about Gold Futures and
Options. You may also call 800-915-4716 or email
tkfutures@earthlink.net your gold future
and gold options questions to be answered by a seasoned professional.
The History of Gold and Gold Futures Market
Throughout the history of mankind gold has been coveted for its unique
characteristics of rarity, beauty, and
near indestructibility. Nations have embraced gold
as a store of wealth and a medium of international
exchange and individuals have sought to possess gold as
insurance against the day-to-day inflationary uncertainties of
paper money. Gold futures and gold options are sometimes used as an inflationary
hedge.
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option account today.
The United States first assigned a formal monetary
role for gold in 1792.
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Gold is a vital industrial commodity. It is an
excellent conductor of electricity, is extremely
resistant to corrosion, and is one of the most
chemically stable of the elements, making it
critically important in electronics and other
high-tech applications.
A broad cross-section of companies in the gold
industry, from mining companies to fabricators of
finished products, can use the COMEX Division gold
future and gold future option contracts to hedge their price
risk. Furthermore, gold has traditionally had a role
in investment strategies, and gold futures and
gold options can be found in investors' portfolios.
Gold future contracts opened for trading in the United States
on December 31, 1974, timed to coincide with the
lifting of a 41-year ban on the private ownership of
gold by U.S. citizens.
Today, gold future prices float freely in accordance with
supply and demand, responding quickly to political
and economic events.
Gold is an effective hedge against inflation. In
addition, gold is inversely correlated to the US
dollar, making it a good currency hedge. As an asset
class, gold has all the advantages of being
universally regarded as a currency, without what are
all too often the disadvantages of being subject to
the economic and monetary policies of one particular
country's government.
Exchange-Based Gold Futures Trading
The New York Mercantile Exchange (NYMEX) merged with the
Commodity Exchange, Inc. (COMEX) in August 1994 to
become the world's largest physical commodity
futures exchange. The gold future contract is one of
the most liquid of the precious metal future
contracts. During the September 11 terrorist attacks
the COMEX was destroyed but within days the gold
futures and gold options markets were trading again.
This is a testament to the strength and viability of
the metals future markets.
Trading is conducted through two divisions; the
NYMEX division, which trades a variety of energy
futures, platinum futures and options platinum and
palladium futures, and the COMEX division which
trades gold, silver and copper futures and options.
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Gold
Futures and Gold Option Contract
Specifications
Trading Unit
 100 Troy ounces
 Price
Quotation
U.S. dollars and
cents per troy ounce.
 Trading
Hours (All times are
New York time)
Open outcry
trading is conducted from 8:20 AM until 1:30 PM.
After-hours electronic trading begins at 2:00 PM on
Mondays through Fridays and concludes at 8:00 AM the
following day, with the exception of Friday's
session which concludes at 4:30 PM that same day. On
Sundays, the session begins at 7:00 PM and concludes
at 8:00 AM the following day.
Trading
Months
Gold futures trading is conducted for delivery during the current
calendar month; the next two calendar months; any
February, April, August, and October falling within
a 23-month period; and any June and December falling
within a 60-month period beginning with the current
month.
Minimum
Price Fluctuation
$0.10 (10¢) per
troy ounce ($10.00 per contract).
Maximum
Daily Price Fluctuation
Initial price
limit, based upon the preceding day's settlement
price, is $75.00 per ounce. Two minutes after either
of the two most active months trades at the limit,
trades in all months of gold futures and options will
cease for a 15-minute period.
Last
Trading Day
Trading
terminates at the close of business on the third to
last business day of the maturing delivery month.
Delivery
Gold delivered
against the gold futures contract must bear a serial
number and identifying stamp of a refiner approved
and listed by the Exchange. Delivery must be made
from a depository licensed by the Exchange.
Delivery
Period
The first
delivery day is the first business day of the
delivery month; the last delivery day is the last
business day of the delivery month.
Exchange
of Futures for Physicals (EFP)
The buyer or
seller may exchange a gold futures position for a
physical position of equal quantity. EFPs may be
used to either initiate or liquidate a gold futures
position.
Margin
Requirements
Margins are
required for open gold futures positions.
Trading
Symbol
GC
To learn more
about the precious metal and industrial metal
futures visit
silver futures,
copper futures and
platinum and palladium
futures.
Also visit
Gold Futures Special Report
To open an account
click
online future trading.
For specific
option trading information visit
commodity research.
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