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The Cost Of Doing A Trade ?

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If I were to purchase £ 5 K of gold today how much would it cost to buy and sell in fee's and where is the best place to make such a purchase ?

Many thanks

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If I were to purchase £ 5 K of gold today how much would it cost to buy and sell in fee's and where is the best place to make such a purchase ?

Many thanks

Are you looking to take delivery of the stuff or are you speculating on the price? Do you want to risk 5k or make a return on 5k?

Happy to talk on the speculation (gold futures and options) but Krugerrands etc not my area.

The Fox

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Are you looking to take delivery of the stuff or are you speculating on the price? Do you want to risk 5k or make a return on 5k?

Happy to talk on the speculation (gold futures and options) but Krugerrands etc not my area.

The Fox

Gold futures :-

- Please explain gold futures

- Please explain options

- How do you trade these methods ?

- Is 5 K enough to play with ?

Thanks Foxytrader !

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Gold futures :-

- Please explain gold futures

- Please explain options

- How do you trade these methods ?

- Is 5 K enough to play with ?

Thanks Foxytrader !

Ok as briefly as I can while not using too much jargon.

Gold futures are contracts traded (New York and Singapore) for "delivery" on a specific series of dates in the future. They are bought and sold by open outcry and screen trading. Neither side has any obligation or generally intention of taking or making delivery of the contract (100oz). The price runs parallel to physical or "spot" gold.

That is the underlying "number" a futures trader or spreadbetter is gambling on. The fundamental difference between buying gold this way and the physical commodity is gearing.

If the June 06 Comex gold contract were trading at $525-$526 I could buy at $526 and for each $ move up or down I will be $100 up or down. However in order to open this position (which is actually worth $52600) I would only need to put up say 10% of that with the broker. Most spreadbetting companies offer credit accounts so you could avoid putting up any money.

On the assumption you are a bull and anticipate gold will rise by a further 10% to $575 in the next 3 months you could close out the contract at $575 with a gain of $4900 ($575-$526x100).

The guy holding £5k of physical gold will be £500 better off in the same scenario.

Options are traded "rights" to buy or sell the underlying commodity for a specific price up to a specified date in the future. In the scenario above "call" or buy options would increase in value while "put" or sell options would fall.

I could now list a litany of financial health warnings but in effect I would say the above scenario could have been reversed and the physical holder would only have lost £500 and you could be sitting on a $5000 running loss.

Be very careful. These things can really ruin your day.

Hope that helps.

The Fox

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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