COMEX

What Is COMEX?

COMEX is the primary futures and options market for trading metals like gold, silver, copper, and aluminum. COMEX is a contraction of the exchange's full name: The Commodity Exchange Inc.

COMEX merged with the New York Mercantile Exchange (NYMEX) in 1994 and turned into the platform responsible for its metals trading. In 2008, the CME Group purchased the NYMEX, including its COMEX division.

Figuring out COMEX

Commodity Exchange Inc. (COMEX), the fundamental exchange for silver and gold futures, was first established in 1933 through the merger of four more modest exchanges situated in New York — the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. The merger between Commodity Exchange Inc. also, the New York Mercantile Exchange (NYMEX) made the world's biggest physical futures trading exchange, where it is as yet known as COMEX.

COMEX physically works out of the World Financial Center in Manhattan and is a division of the Chicago Mercantile Exchange (CME). As per CME Group, there are more than 400,000 futures and options contracts executed on COMEX daily, making it the most liquid metals exchange in the world. The prices and daily activities of global traders on the exchange influence the precious metals markets around the world.

COMEX fills in as the primary clearinghouse for gold, silver, and copper futures, which are all traded in normalized contract sizes, as well as a mini or potentially micro variant. Different futures contracts traded on the COMEX incorporate aluminum, palladium, platinum, and steel. Since the futures market is for the most part a hedging vehicle for moderating price risk, the majority of futures contracts are rarely delivered. Most trades are made essentially on the commitment of that metal and on the information that it exists. It is not necessarily the case that a trader or hedger can't take delivery of physical metals through the COMEX, yet under 1% of the trades really go to delivery.

For traders hoping to take actual (physical) delivery on a futures contract, deliveries are accessible beginning on the first notice day and reach out to the last day of the contract period. To take delivery, the futures contract holder must initially alert the clearinghouse of their intentions and must illuminate the COMEX that they plan to claim the physical commodity in the trading account. Somebody who needs to take delivery on gold, for instance, will lay out a long (buy) futures position and hold on until a short (seller) tenders a notice to delivery.

The COMEX is the world's leading setting for trading in options and futures on gold and silver.

Special Considerations

It is important to note that the COMEX itself doesn't supply precious metals. These are made accessible by the seller as part of the contract rules. A short seller that doesn't have the metals to deliver must liquidate their position by the last trading day. A short that goes to delivery must have the metal, like gold, in an approved depository. This is addressed by the holding of COMEX-approved electronic depository warrants or warehouse receipts, which are required to make or take delivery.

An investor who solicitations to take delivery will be given COMEX OK or deliverable bars, which are precious metal bars delivered by COMEX-approved purifiers and made to severe standards set by COMEX. For metals to be considered as COMEX deliverable or good delivery, they must fulfill certain guidelines that direct the minimum virtue of the bar, as well as its weight and size.

Delivery happens by the transfer of ownership of the metal warrant two business days after the seller gives the notice of intent. The transfer happens at the settlement price set by the exchange on the day the seller gives the notice of intent. The exchange doesn't decide or set the price for precious metals. These are set by buyers and sellers paying notice to the level of demand and supply in the market.

Features

• Metals futures are generally utilized for hedging and are not normally delivered.
• It is a division of the Chicago Mercantile Exchange (CME) Group.
• COMEX is the world's biggest futures and options trading for metals.
• The COMEX doesn't supply metals however rather acts as an intermediary.

FAQ

What Is the Most Active Issue on the COMEX?

Products connected with gold and afterward silver are the most actively traded on the COMEX.

Beside COMEX, Where Else Is Gold Traded?

The majority of gold trading in the world happens on the COMEX, along with the London OCT and Shanghai Futures and Gold Exchanges. Other important markets incorporate Dubai, India, Japan, Singapore, and Hong Kong; in any case, these are far more modest.

The amount Gold Is Traded on the COMEX?

As per the COMEX, contracts covering around 41,799,646 ounces of gold (1,306 tons) are traded each day on its exchange.