Buying Platinum Call Options to Profit from a Rise in Platinum Prices | The Options & Futures Guide

Platinum options, Platinum Option Quotes - CME Group


    By Matthew Johnston Updated Nov 11, Platinum is regarded as an important precious metal by many investors though it's less commonly talked about than gold and silver.

    Many investors use platinum as a hedge against inflation or as a safe haven in troubling economic times. Platinum is also valuable as an industrial metal, used in the manufacturing of products such as cars, jewelry, and electronics.

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    To gain exposure to the metal, investors may purchase platinum bars or coins, platinum futures contracts, or shares of platinum mining companies. Another option is a platinum exchange-traded fund ETF.

    This instrument tends to be more liquid than holding the physical commodity, and does not require paying related storage or insurance costs.

    Platinum call options are purchased by traders who are bullish about platinum prices. Traders who believe that platinum prices will fall can buy platinum put options instead. Buying calls or puts is not the only way to trade options.

    Key Takeaways Platinum prices have dramatically underperformed the broader market over the past year. These ETFs are backed either by physical platinum or platinum futures contracts, rather than stocks of platinum mining companies.

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    There are two main types of platinum ETFs for investors to choose from. These products are unsecured debt securities that track an underlying index and trade on a major exchange in the same manner as a stock. Platinum ETNs invest in futures contracts that track the price of the metal, as opposed to holding it in physical form.

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    There are 3 distinct platinum ETFs that trade in the U. They are aimed at tracking the price of platinum by holding the physical metal or through futures contracts and do not hold shares of platinum mining companies.

    Further Reading Investing in platinum offers a way to express a bullish view on global growth. We present a number of common arguments for and against investing in this commodity.

    Platinum futures prices, which generally drive these ETFs, have fallen 2. We examine the 3 platinum ETFs that trade in the U.

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    Platinum options numbers below are as of November 10, This can result in higher trading costs which can negate some of your investment gains or increase platinum options losses.