Spot gold - Margin Trading
Gold Margin trading has three major functions: first, the price discovery; second is hedging; third is speculative profit. Gold price discovery function of futures trading, gold futures prices reflect the future spot price of gold. The margin hedging in futures trading and spot bond transactions can be realized, (the futures hedging patent, the spot does not have this feature) may be necessary here to explain the concept of gold hedging, which refers to gold dealers in order to the future price of gold to avoid the uncertainty caused by changes in market risk, the risk taken to lock or lock returns the current value of the market operation practices. As the margin trading is a high leverage, and thus has also become a tool for investors in speculative profits. Gold Margin Trading What are the characteristics?
Spot gold
Gold Margin trading is a double-edged sword, when the gold or the gold-producing companies to avoid the need for cash to hedge market risks, the need not take up a lot of money, only need to pay a certain percentage of deposit, as the time of physical delivery guarantees. Such a transaction means to reduce the financial pressure of the market participants, that is its advantage. Drawback is mainly reflected in the often brings great risks, investors blindly if the number of speculative hedge to enlarge, once the decision is wrong and will incur substantial losses or even bankruptcy of enterprises.
Spot Margin trading Margin trading and futures What is the difference?
Spot Gold Margin Trading on behalf of the London spot market, it does not have a fixed place of trading, London's five major gold dealers (Rothschild, Campbell Lee, 10000, Scientology, 10000 Gadda, the United States think of the Pacific), as participants in the global market counterparties, the investment those who buy gold, because only a certain proportion of cash paid deposit, the remaining loan is similar to bank loans, so to pay a certain percentage of interest on a daily basis. Interest can also be interpreted as a golden opportunity will be the cost of losses. Gold futures traded on margin, the United States, the New York Mercantile Exchange and the New York Mercantile Exchange as the representative of a fixed place of trading, its transaction is not the subject of spot gold itself, but the gold standard sale and purchase agreement, trade agreement the two sides in the future a specific time for the agreed price physical delivery of gold.
