Platinum could potentially squeeze. More open interest currently for January than inventory available at NYMEX

Submitted by TheHappyHawaiian t3_zytcv7 in wallstreetbets

Platinum open interest exceeds available inventory at NYMEX, time to buy Plat!

Quick primer:

Open interest is how many contracts are outstanding for a certain futures contract month

First notice is the day that shorts can issue delivery notices to longs, and if you remain long on first notice day then you must put up 100% of the contract value rather than 10%, so you have to be serious about taking delivery to stay long into first notice

What just happened:

More longs are putting up the cash to take delivery in January than there is metal available currently in NYMEX warehouses

Specifically 141k ounces worth of longs to 135k ounces worth of inventory. Even worse for shorts is that only 79k of that 135k is “registered” meaning readily available to be delivered into those contracts.

This means shorts will need to buy their way out of a big chunk of these contracts or move metal in from elsewhere

This was likely happening today in part as the price of platinum surged 5%.

Inventories are quite strained currently, as NYMEX warehouses have gone from over 800k in early 2021 to only 135k now.

My positions:

I own physical platinum, PPLT, IMPUY, ANGPY, and a small amount of calls

PPLT and physical are the biggest piece of my exposure though

Highly recommend getting some exposure to platinum!

Good luck!

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Comments

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VisualMod t1_j27rlaq wrote

>You're right, the open interest in platinum is definitely worth paying attention to. I'm going to add it to my watchlist and see if there are any opportunities to get involved. Thanks for the heads up!

35

sjonnyboy t1_j28g775 wrote

Yo VM , what does your portfolio look likes ?

10

Sm4rt_Inv3st0r t1_j27u7m2 wrote

An unprecedented squeeze to the physical platinum is coming!!! If this plays out, silver is next 😉

33

Educator-Itchy t1_j2bjfn0 wrote

buy physical platinum...If paper is squeezed, nymex will increase margin and prohibit buying and allow only selling so bankers win again.

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wilswj89 t1_j284o8x wrote

Ok I’m in. SPLT is a U.K. version

14

goo_bazooka t1_j28czhj wrote

“Squeeze” = downvote

Only thing squeezing is your butthole

12

SushiSamurai808 t1_j27sew3 wrote

Have you thought about gourd futures? Platinum has limited use because it can’t be eaten. I mean, I haven’t tried eating platinum…

11

RenVP t1_j29jqmf wrote

What about Platinum from other sources? How big is the NYMEX inventory in relation to the global Platinum inventory?

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TheHappyHawaiian OP t1_j2b53kq wrote

Well delivery has to come through NYMEX, so those inventories are worth watching

9

JLiverless t1_j2fn04j wrote

OK, platinum. Is anything similar happening with the (also traded but less liquid) similar precious metal palladium? Often they move together. Both are precious, and both are used as catalysts for pollution control in gasoline (petrol) engines.

There's at least one actively traded palladium ETF, the ticker symbol being PALL. Will it s-q-u-e-x-e-z-e too?

5

That-Whereas3367 t1_j295ykd wrote

NYMEX is an exchange - it doesn't have any warehouses.

Traders are speculating - almost nobody takes physical delivery.

The futures contracts in precious metals are always much higher than the physical metal available. They are simply rolled over.

There is no realistic possibility of any meaningful squeeze on platinum or any other precious metal.

3

TheHappyHawaiian OP t1_j29cfb6 wrote

Have you actually looked at the numbers for January?

Most roll over yes, January OI peaked at over 3 million ounces, but 141k worth of longs are taking delivery this month

So what you’re saying is usually true, but now, for January Platinum, it is not

14

Apsco60 t1_j29cdlp wrote

>There is no realistic possibility of any meaningful squeeze on platinum or any other precious metal.

I do not necessarily agree with this one although I believe squeeze discussions are usually overblown. For platinum they are not.

10

VisualMod t1_j27rkxy wrote

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^^Discord ^^BanBets ^^VoteBot ^^FAQ ^^Leaderboard ^^- ^^Keep_VM_Alive >TL;DR: There are more longs than there is available platinum to deliver in January, meaning shorts will need to buy their way out of a lot of these contracts or move metal in from elsewhere. This was likely happening today in part as the price of platinum surged 5%.

1

LokiPokee t1_j295uva wrote

What is there to buy calls on? Tickers posted have none

1

Same_Class5866 t1_j2cis4l wrote

So what's the problem are we not acquiring enough platinum? Or is there not a big demand for it currently?

1

4moneystuff t1_j28ivz7 wrote

Gawd - another DD with a “squeeze” that’s so 2021 - ignore this thread.

−9

caputviride t1_j28lmpu wrote

Yeah, let’s just blow more money on SPY calls instead!

6