Metals
Overview
We are a leading provider of futures brokerage services in the metal futures and
options arena. Our clients include speculators, hedge funds, institutions, commodity
hedgers, principal producers, processors, consumers, and dealers of the traded metals
in all geographical regions. Traders are provided access to high-end trading technology
for electronic or pit-traded order execution, metal market-making, trade clearing,
and contract administration.
We give traders access to exchange traded as well as over-the-counter products –
from the standard to the exotic.
- Gold, Silver, Copper, Platinum, Aluminum and Palladium Metal Futures and Options
- Metal Forward swaps and OTC options
- Metal Warrant swaps
- Inventory management
- Metal Arbitrage swaps and options
- Physical trading and financing
Research
Our clients will have access to market research that is structured to meet a wide
variety of needs. Services in this area range from the intra-day analysis of the
most recent fundamental and technical developments affecting pricing to longer-term
strategic research of supply, demand, and inventory trends of the precious metals
group. Market research provides price forecasting, analytical research on hedging
and trading strategies, impact of changing accounting standards, developments in
risk management, and current hedge activities and strategic thought in the various
sectors of the market.
Basics
Metal futures provide producers, manufacturers, traders and speculators with cost-efficient
trading and risk management opportunities. The contracts are firm commitments to
make or accept delivery of a specified quantity and quality of a commodity during
a specific month in the future at a price agreed upon at the time the commitment
is made. However, less than 1% of all metals futures contracts traded result in
delivery of the underlying commodities. Instead, investors offset their futures
positions before their contracts mature.
For most people, buying and storing the physical form (i.e. coins, bullions, bars)
is not a practical choice as an investment. Businesses and individual traders trade
metal futures for different reasons, but the primary goal is to profit from, or
protect themselves from changes in the price of the underlying metals. Producers
and manufacturers, such as companies involved in mining or industrial and manufacturing
industries, utilize metal futures for managing or mitigating risk and hedging raw
material costs and finished product revenues against adverse price fluctuations.
Individual traders or speculators trade metal futures to speculate on the commodity
price fluctuations.
Gold Futures
For centuries, gold has been coveted for its unique blend 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 uncertainties of paper money. Gold is also a vital industrial
metal -- it’s 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. Gold's importance in world markets
and responsiveness to world events make gold futures and options an important risk
management tool for investors who seek to profit by correctly anticipating price
changes.
Silver Futures
Silver has attracted man's interest for thousands of years, and relics of ancient
civilizations include jewelry, religious artifacts, and food vessels formed from
the durable, malleable metal. In 1792, silver assumed a key role in the United States
monetary system when Congress based the currency on the silver dollar which was
used for the nation's coinage until 1965. Today, silver is sought as a valuable
and practical industrial commodity, and as an appealing investment. The largest
industrial users of silver are the photographic, jewelry, and electronic industries.
Copper Futures
Copper, one of the oldest commodities known to man, is a product that directly reflects
the state of the world economy. Its softness, color, and presence in nature enabled
it to be easily mined and fashioned into primitive utensils, tools, and weapons.
Five thousand years ago, man learned to alloy copper with tin, producing bronze
and giving rise to a new age. Today, it’s the world's third most widely used metal,
after iron and aluminum, copper is primarily used in highly cyclical industries
such as construction and industrial machinery manufacturing. Copper is the world's
third most widely used metal and its fortunes directly reflect the state of the
world economy. The copper futures and options contracts are an important risk management
tool.
Platinum Futures
Jewelry creates the largest demand for platinum, accounting for 51%. Automotive
catalysts take 29% and chemical and petroleum refining catalysts, 13%. Platinum
is also used in the computer industry and in other high-tech electronic applications
since it is an excellent conductor of electricity, does not corrode, and has a low
reactivity with other metals. This sector accounts for about 7% of consumption.
Platinum is among the world's scarcest metals; new mine production totals approximately
only 5 million troy ounces a year. In contrast, gold mine production runs approximately
82 million ounces a year, and silver production is approximately 547 million ounces.
Platinum and palladium are the most widely used of the six platinum group metals,
which also includes rhodium, ruthenium, osmium, and iridium. They possess unique
chemical and physical qualities that make them vital industrial materials.