How leverage for spot metals works+
Leverage for spot gold and silver trading is set at 100:1. This means that for every $1 you have in your account balance, you have $100 in buying and selling power for gold trading. As a result, leverage increases a client's buying and selling power and enables clients to participate in a market that may otherwise be cost prohibitive. Keep in mind that increasing leverage increases risk.
How margin for spot metals works
Margin is the amount of money you must have in your account to hold a particular trade. At 100:1 leverage, your margin factor is 0.01 (1%). This means that you are required to have a minimum cash balance of 1% of the total value of the positions you hold in your account at any one time. If you fall below this amount, your trade may be closed automatically, otherwise known as being liquidated.
Let's look at an example:
Let's say you would like to place a trade of 1 lot (10 troy oz) of spot gold, and you would like to buy it at $920.55. The amount of margin you would be required to maintain would be 1% of your trade size.
So, 10 (oz) multiplied by the price, 920.55 and multiplied by the margin factor, 0.01 would give you $92.06.
10 x 920.55 = $9,205.50
$9,205.50 x .01 = $92.06
This is the margin requirement for a single lot of spot gold bought at $92.06. If your account balance falls below this level, your trade would be automatically closed. Another way to look at this example is to say that 100:1 leverage gives you the ability to trade 10 ounces of gold, at 920.55, with $92.06.
Tuesday, December 1, 2009
Calculating P & L of Trading Spot Gold and Silver
Profit and loss calculations for spot gold and silver are fairly simple. The smallest increment of a spot gold price is 0.01. For spot silver, it is .001. The smallest trade you can place in spot gold or silver is a single lot. For gold that is 10 troy ounces, and for silver it is 500 troy ounces. At this level, each pip is worth $0.10 for gold and $5 for silver. For example, a change in price from 920.55 to 920.85 in gold means a difference of 0.30, or 30 pips. If you are trading 1 lot, and each pip is worth 10 cents, then the profit or loss from this trade would be $3.00.
If you decide to trade more than one lot, the value of each pip is simply multiplied by the number of lots you are trading.
If you decide to trade more than one lot, the value of each pip is simply multiplied by the number of lots you are trading.
more Advantages
Quality executions  Our mission is to provide you a fair, efficient trading environment, which means quoting competitive spreads and ensuring quality executions. Our customer base represents traders from over 140 countries, and the firm trades nearly $200 billion per month with its customers and trading partners.* Top 10 reasons currency traders choose FOREX.com Powerful trading tools Spot and seize potential market opportunities with our forex trading platform. We designed our tools to make it easy to put your trading strategy into action with advanced order management tools, a choice of robust charting packages, and auto execution tools. 24-hour access to licensed representatives Reach our knowledgeable, Series 3 registered reps 24-hours a day during market hours and on Saturdays from 9am-5pm ET. Get answers quickly by phone, email or chat. | | Forex training and education Whether you need ideas for a new strategy, to brush up on platform tools, or just to learn our platform for the first time, we have the resources you need at FOREX.com. Open a free forex practice account to test your knowledge with no risk or obligation, attend a webinar, or check our schedule for a forex workshop in your area. Market research you can count on Our experienced research team provides robust market analysis you won't find anywhere else, from real-time commentary to essential daily and weekly reports that summarize key market developments with an insightful perspective. More about our forex research offering. System stability and reliability Our technology infrastructure is designed to support a 24-hour trading environment during market hours with 100% uptime. We subject our systems to rigorous testing and maintain multiple connections through internet backbones to assure connectivity for our clients around the globe.Successful firm with solid financials FOREX.com is a division of GAIN Capital Group, LLC, a pioneer in the online foreign exchange industry. The firm is well-capitalized, with an experienced management team and strong corporate governance. GAIN's majority shareholders are five well-known U.S. venture capital and private equity firms with nearly $25 billion in combined assets. More awards & accolades. |
Forex training and education
Whether you need ideas for a new strategy, to brush up on platform tools, or just to learn our platform for the first time, we have the resources you need at FOREX.com. Open a free forex practice account to test your knowledge with no risk or obligation, attend a webinar, or check our schedule for a forex workshop in your area.
The Forex Advantages
Trade currencies and spot metals at FOREX.com. Dealing spreads are as low as 1-2 pips on the most widely traded currency pairs. As always, you pay no commissions at FOREX.com, only the bid/offer spread. Our prices are quoted in more precise 0.1 pip increments to help you take advantage of smaller price movements.
At FOREX.com, you pay no commissions to trade. Your only transaction cost is the dealing spread - the difference between the bid and the ask price.
Trade on spreads as low as 1-2 pips for most major currency pairs, backed by our commitment to deliver the best possible execution on every trade.
Tighter spreads save you money
Pricing
Trade on spreads as low as 1-2 pips, with fractional pips for more precise quoting. |
Real-time prices are quoted in more precise 0.1 pip increments, displayed in a slightly raised font in the dealing box. |
Trade on spreads as low as 1-2 pips for most major currency pairs, backed by our commitment to deliver the best possible execution on every trade.
Tighter spreads save you money
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