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Trading Platinum (XPT)

Platinum

Platinum has become a popular trading instrument in recent years as traders have seen the benefit of trading this asset.

Traders looking to trade this instrument need to keep in mind the major price drivers. Platinum is predominately traded in one country, South Africa (80%) and therefore any strike or disruption will have an impact on price. Platinum’s annual production is approximately 5 million troy ounces a year compared to gold’s 82 million troy ounces per year and silver’s 547 million troy ounces.

It’s special properties put it in large demand in diverse industries. From cars to jewelry to health science, it plays a vital role in everyday life. For example, cars which use catalytic converters account for 29% of the world production.

Factors That Influence Platinum’s Price

The price of platinum can be influenced by the following factors:

  • About 51% of platinum is used in jewelry. As a result this leaves platinum exposed to changing tastes and consumer demands. Any changes in buying habits could potentially lead to quick drops or jumps in platinum prices.
  • Platinum is an essential component in catalytic converters and is used as a catalyst in fuel cells. Fuel-cell scientists are working to reduce the amount of platinum required to operate fuel cell devices. The future use of platinum could be key with major industrial countries advocating for reduced reliance on oil and increased green energy consumption.
  • Platinum is used in the fight against cancer. Platinum-dependent compounds are used in various forms of chemotherapy. Despite current adverse side-effects on kidneys and hearing, platinum-based chemotherapy shows a promising future as a form of treatment.
  • Platinum is also involved in the use of archival photography, thermometers, electrodes, crucibles for high temperature melting, and various small electronic devices.

XPT

 

Online trading

Like trading currencies, online trading in platinum with easyMarkets is “cash” settled i.e. there is no physical receipt of the underlying physical product.

Trading in the precious metals is done via ‘over the counter’ or OTC. OTC transactions are not centralised as in a stock exchange of a country. Trading is initiated directly between the buyer and the seller.

Contract Specifications

The contract specifications for platinum:

Trading unit:
Futures: Trading takes place in lots of 50 troy ounces.

Trading hours: Platinum trading begins on Sunday 23:00 GMT and ends 22:00 GMT Friday night with a daily break between 22:00 to 23:00. Platinum is mostly traded worldwide between 01:00 – 17:30 GMT, Monday to Friday, and spreads are usually higher during out-of-business hours.

Price Quotation: The contract price is quoted in dollars and cents per troy ounce.

Day-trades in platinum

Traders can open positions in platinum using the day-trading option to trade the precious metals at spot prices.

For more information on platinum and other related trading products, go to our blog website, forex.info.

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