New 10-ounce spot gold futures will trade under NAU symbol

Nasdaq OMX Group Inc said on Wednesday it is launching new spot gold futures that will be cash-settled with an aim to simulate over-the-counter trading of spot bullion.

The global exchange operator said it will partner with IKON Global Markets, a U.S. futures commission merchant, to offer the 10-ounce contracts, which will trade under the symbol NAU on the Nasdaq OMX Futures Exchange (NFX).

The new product will be settled on a cash basis, unlike the CME Group’s 100-ounce U.S. COMEX gold futures, which allow physical delivery.

“Ultimately, all investors will benefit from a product with unique features that allow for flexibility and trading strategies without concerns over delivery and forward rolling dates,” Nasdaq said in a statement.

The over-the-counter market, which allows investors to trade spot gold around the clock, and the U.S. gold futures are by far the most popular global trading venues of gold and other precious metals.

Gold futures allow funds and institutional investors to trade on a leverage basis, and also gold producers to sell forward contracts to hedge against the downside risk of their future output.

NYSE Liffe, a unit of NYSE Euronext, offers
100-ounce gold contracts , while the CME Group also offers 50-ounce COMEX miNY gold futures . Both products offer investors the option of physical delivery.

Nasdaq said the new product was in line with the U.S. Dodd-Frank legislation as it provides central counterparty clearing and the client protections of The Options Clearing Corp. –  - Reuters

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Posted by admin on Feb 8 2012. Filed under Gold price. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry