The Tokyo Commodity Exchange (TOCOM) has received on October 16th, 2008 the approval from the Ministry of Economy, Trade and Industry (METI) to introduce a cash-settled platinum futures transaction (referred to as the “Platinum Mini contract”). TOCOM has set November 10th, 2008 as the starting date for trading the Platinum Mini contract.
The contract unit for TOCOM's existing physically delivered platinum futures transaction (referred to as the “Platinum Standard contract”) is 500 grams. The contract unit of the Platinum Mini contract is 100 grams, which is one-fifth of the standard contract. TOCOM's platinum futures transactions will now be done through 2 contracts: the standard contract and the mini contract.
As is the case with all the other commodity futures contracts listed at TOCOM, customers will also have the option to use the “Loss Cut” system with the Platinum Mini contract. The purpose of the Loss Cut system is to try to prevent losses over a limit specified by each customer. Under the Loss Cut system, a Futures Commission Merchant will execute an order to offset a Platinum Mini position, in accordance with a predefined procedure, if his customer's loss reached a certain limit specified by the customer in advance, based on the terms and conditions determined by the Futures Commission Merchant (the details of the Loss Cut system are different from one Futures Commission Merchant to the other).
Please click here for the Comparison of the Platinum Standard and Mini Contracts.