Page 24 - Bullion World Volume 3 Issue 12 December 2023

Bullion World | Volume 3 | Issue 12 | December 2023

Within the OSE precious metals market, gold is the than their dollar-based counterparts, reaching new highs
largest with 80% of the market volume, followed by due to the weaker yen, while the global dollar-based
platinum with 20%, and both are traded in three types: gold prices have remained relatively elevated within a
standard, mini, and rolling spot (RS) futures. The certain range. Another feature of the OSE market is
standard is a physically-delivered contract and has the that, unlike overseas markets where liquidity is typically
highest trading volume with a wide range of participants, concentrated in the front contract month, liquidity in the
including overseas investors and individuals, as well as OSE market tends to be focused in the distant months.
the firms that use it for hedging purposes. Mini and RS Contract months are set for six even-numbered months
are cash-settled contracts that are one-tenth the size from the present to one year in the future, with the most
of the standard and are suitable for retail investors and actively traded contract month being the even-numbered
those who wish to gain exposure to the price movements month one year ahead.
without the inconvenience of dealing with physical bars.
Settled daily with positions automatically rolled over, RS Moreover, the OSE market stands out for its active
functions as a futures contract with no expiration date, participation of Japanese retail investors. Individuals
enabling participants to hold positions for extended contribute to 21% of the trading volume in gold standard
periods and seek profit opportunities, resulting in the contract and 26% in platinum standard contract. In
highest volume of open interest among the three types. terms of open interest, these figures are even higher at
50% for gold and 38% for platinum. These individual
Features of OSE precious metals market investors typically have trading behavior that differs from
One key characteristic of the market is that OSE traders and hedgers, making them a crucial component
precious metals are denominated in Japanese yen. of the OSE market's diverse customer base.
Recently, the OSE gold prices exhibited greater volatility

Conclusion
The OSE precious metals market has a well-established history and is evolving rapidly as part of the
JPX market ecosystem, offering participants a proven high level of reliability and convenience. Easily
accessible from overseas and distinguished by unique features not found in its peers, OSE plays an
important role as the risk management and trading venue for the precious metals industry.

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