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Aluminum Futures Trading Basics

Aluminum futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of aluminum (eg. 25 tonnes) at a predetermined price on a future delivery date.

Aluminum Futures Exchanges

You can trade Aluminum futures at London Metal Exchange (LME), New York Mercantile Exchange (NYMEX) and Tokyo Commodity Exchange (TOCOM).

LME Aluminum futures prices are quoted in dollars and cents per metric ton and are traded in lot sizes of 25 tonnes (55116 pounds).

NYMEX Aluminum futures are traded in units of 44000 pounds (19.96 metric tons) and contract prices are quoted in dollars and cents per pound.

TOCOM Aluminum futures prices are quoted in yen per kg and are traded in lot sizes of 5000 kilograms (5 metric tons).

Exchange & Product NameSymbolContract SizeInitial Margin
LME Aluminum Futures
(Price Quotes)
AH25 tonnes
(Full Contract Spec)
USD 4,375 (approx. 12%)
(Latest Margin Info)
NYMEX Aluminum Futures
(Price Quotes)
AL44000 pounds
(Full Contract Spec)
USD 3,038 (approx. 10%)
(Latest Margin Info)
TOCOM Aluminum Futures
(Price Quotes)
-5000 kilograms
(Full Contract Spec)
JPY 75,000 (approx. 11%)
(Latest Margin Info)

Aluminum Futures Trading Basics

Consumers and producers of aluminum can manage aluminum price risk by purchasing and selling aluminum futures. Aluminum producers can employ a short hedge to lock in a selling price for the aluminum they produce while businesses that require aluminum can utilize a long hedge to secure a purchase price for the commodity they need.

Aluminum futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable aluminum price movement. Speculators buy aluminum futures when they believe that aluminum prices will go up. Conversely, they will sell aluminum futures when they think that aluminum prices will fall.

Learn More About Aluminum Futures & Options Trading

How to Start Trading Aluminum Futures

To buy or sell aluminum futures, you need to open a trading account with a broker that handles futures trades. Most online brokerages out there only deal with stocks and stock options. Only a few such as TD Ameritrade lets you trade futures and futures options as well. TD Ameritrade also provide a virtual trading platform where beginners can try out futures and options trading in real market conditions without using real money.

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