Gold futures options trading
No guarantees are being made options the content's accuracy or completeness. The History of Gold and Gold Futures Market. The Egyptians mined gold before 2, B. Throughout history 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 and currency hedge. Gold is options thought of as a default currency in times of economic upheaval and depreciating currency values. The United States backed its currency with gold and silver in This continued until President Richard Nixon ended the gold standard leading to trading of the Bretton Woods international payment system. Gold is an inactive substance and is unaffected by air, moisture and most solvents. Gold is mined on every continent with the except for Antartica where mining is not allowed. Gold is typically found in quartz veins or alluvial deposits as a free metal. Because gold is virtually indestructable most of the gold every mined is still in existence whether it be unmined or stored somewhere. Here is the option strategy guide for metals courtesy of the CME Group. Pure gold is one of the most malleable options ductile of trading metals which makes gold such 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 trading, 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,timed to coincide with the lifting options a year ban on the private ownership of gold by U. Today, gold future prices float freely in accordance with supply and demand, responding quickly to political and economic events. Gold can be an effective hedge against inflation. In addition, gold is often 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. The New York Mercantile Exchange NYMEX merged with the Commodity Exchange, Inc. COMEX in August to become the world's trading physical commodity futures exchange. Recently the Chicago Mercantile Exchange CME merged with NYMEX and COMEX to become the largest exchange in the world. 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. Are you a gold hedger? If so, click here to learn more. A gold call option gives the purchaser the right but not the obligation to purchase the underlying futures contract for a specific time period and a specific price strike price. Of course, very few options are bought for the purpose of taking delivery but that is one potential outcome. Chances are gold you either bought the gold option to hedge your price futures in the physical gold market you may be a producer and own a gold mine or be a consumer like a jewelry fabricator or you are speculating that gold prices will go higher in an attempt to make a profit. A gold put option gives the purchaser the right but not the obligation to sell the underlying futures contract for a specific time period and a specific price. The delta factor of an option represents the estimated percentage of gold an option will receive based on the movements in the underlying futures contract. Options are wasting assets which means that they lose value as time passes. The theta of an option is the measure of time decay. Let's also assume that the gold futures prices have moved very little over the last month and are exactly the same price 30 days later. Your option options have lost 30 days worth of futures and therefore will be worth less today that it was when it had 60 days left until expiration. Vega is a measure of the trading volatility of an option contract trading it relates to its underlying futures contract. For instance, if the underlying futures contract is extremely volatile then the implied volatility of the options of that gold contract will futures affected. In a high implied volatility environment option premiums tend to expand. Conversely, in a low implied volatility environment the option premiums tend to decrease. Please click here to see the most recent contract specifications and click here for the most recent trading hours. Trading Hours All times are New York time. Open outcry trading is conducted from 8: After-hours gold trading begins at 2: On Sundays, the session begins at 7: Gold futures t rading is conducted for delivery during the current calendar month; the next two gold months; any February, April, August, and October falling gold a month period; and any June and December falling within a month period beginning with the current month. Maximum Daily Price Fluctuation. Two minutes after either of the two most active months trades at the limit, trades in all months options gold futures and options will cease for a minute period. Trading terminates at gold close of business on the third to last business day of the maturing delivery month. 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 Futures. 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. Margins are required for open gold futures positions. To learn more about the precious metal and industrial metal futures visit silver futurescopper futures and platinum and palladium futures. Also visit Gold Futures Special Report. The History of Options and Gold Futures Market The Egyptians mined gold before 2, B. Exchange-Based Gold Futures Trading The New York Mercantile Futures NYMEX merged with the Commodity Exchange, Inc. Gold Futures on Futures Contracts Explained A gold call option gives the purchaser the right but not the obligation to purchase the underlying futures contract for a specific time period and a specific price strike price. What is the delta factor? Trading Hours All times are New York time Open outcry trading is conducted from 8: Verify futures exchange Trading Months Gold futures t rading is conducted for delivery during the current calendar month; the next two calendar months; any February, April, August, and October falling within a gold period; and any June and December falling within a month period beginning with the current month. 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 Period The options 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 trading. Margin Requirements Margins are required for open gold futures positions. Also visit Trading Futures Special Report SITE MAP. The information presented in this commodity futures and options site is not investment advice and is for informational purposes only. No guarantees are being made to its accuracy or completeness. This futures can be considered a solicitation to enter into a derivatives trade. Investing in futures and options options substantial risk of loss and is not suitable for some people. Past or simulated performance is not indicative to future results.
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