Metals Futures


Metals Futures are standardized futures contracts to buy or sell some of the most widely traded metals at a certain price and time in the future. Metals included are aluminium, copper, zinc, lead, tin and nickel.

These contracts are standardized, exchange-traded and are physically delivered at an agreed upon date in the future. With metal futures you can look to protect your investment or to speculate on price movements and gain leverage.

More About Metals Futures

Continue reading to learn more about:

The benefits of investing in precious metals
How are precious metal futures traded?
Several advantages of futures contracts
Influencing the price of silver futures
Gold futures are fully settled in cash


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The benefits of investing in precious metals


Investing in metals is a popular way to diversify your portfolio. Many investors choose precious metals because of their historical track record and relative price stability over time.

Precious Metals such as gold, silver, and platinum are globally recognized storehouses of value. From banks to organizations and individuals, gold has been a standard hedge against inflation and economic downturn for thousands of years. Investing directly in precious metals is more affordable than ever before, making this a very attractive income stream that can be tailored to meet your specific needs.


 
 

How are precious metal futures traded?


Precious metal futures contracts are traded on the New York Mercantile Exchange (NYMEX). Metal futures are agreements to buy or sell a commodity of a certain type at a fixed price at a future date. A futures contract is not like an option in which you have the right, but not obligation, to buy or sell Metal futures traders can open short and long positions in precious metal futures, which means they either agree to purchase precious metals on a specified date or assume the obligation to sell their precious metals holdings on that same day.

 

Several advantages of futures contracts


Futures contracts have several advantages over other types of financial contracts.

• First, futures allow you to speculate on price movement while limiting profit loss because they're settled in cash.

• Second, unlike options, which are over-the-counter instruments, futures trade on an exchange.

• And last, futures' daily price limits ensure trading is orderly, without wide price fluctuations.

Futures contracts give buyers and sellers of the commodities the ability to hedge against price increases or decreases, as well as increase their investments and profits. A futures contract is an agreement to buy or sell a specified quantity of a commodity at a specific price during a specified future month or year. To buy a futures contract, you must pay the full amount of the contract.
 
  • Influencing the price of silver futures

    Future prices of precious metals, including silver, are derived from the continuous flow of market information that characterizes futures trading. Investors who want to affect the price of silver futures should monitor which way the physical silver bullion is moving in the open market and shift their long or short position as appropriate. If you are looking to trade silver futures, you need to know the factors that can influence bullion prices.
  • Gold futures are fully settled in cash

    You can buy or sell gold in the form of futures. This means that you don't have to actually buy the physical metal. Instead, you place your order in the market and only pay if your order is filled by an actual gold purchase or sale between other parties for delivery at a later date. Futures are not guaranteed. There is always a risk associated with their value, including leverage and liquidity risks.