Trade Metals On High Leverage Up to 500: 1

Whilst metals are traded on exchanges across the world, the New York Commodity Exchange (COMEX) is considered the primary market for gold and silver futures.

Gold is the ultimate precious metal, having been used for jewelry and a form of payment for thousands of years. Whilst silver is also considered to be a precious metal, it is much cheaper in value which makes it more useful as an industrial metal than a store of wealth.

As gold and silver are prices in the US dollar, traders will also analyze the strength of weakness of USD to aid with their metals trading. However other factors are also at play.

Historically, gold has been used as a hedge against inflation; this means investors would purchase gold is they were concerned that inflation was rising. However, with many central banks offering or considering negative interest rates, gold has attracted investors attention once more as a hedge against NIRP (negative interest rate policy).

Gold also attracts safe-haven flows, which means traders buy gold during times of uncertainty. For example, gold prices rise at the start of 2020 as the stock markets began to roll over from all-time highs and other safe haven markets such as JPY and CHF also rose in value.

Whilst silver tends to correlate with gold, it doesn’t always do so and the two prices can diverge. Silver prices are also a lot more volatile than gold, leaving some to say that “gold is to hold, silver is to trade”.

Long example: Gold (XAUUSD)
A trader buys 1 contract of gold (100 ounces) at USD $1730

• If the prices rise to $1,740 the trader could exit for a profit around $1,000
  • (# contracts x contract size) x (exit price – entry)
  • (1 x 100) x ($1,740 – $1,730)

• If prices fall to $1,725 the trader could exit for a loss around -$500
  • (# contracts x contract size) x (exit price – entry)
  • (1 x 100) x ($1,725 – $1,730)

• A 1% margin requirement with 100:1 leverage requires $1,730 of capital
  • (# contracts x contract size x price) / leverage
  • (1 x 100 x $1,730) / 100

Short example: Silver
A trader sells 3 contracts of silver (5,000 ounces per contract) at $16.50

• If prices fall to $15.00 the trader could exit for a profit around $22,500
  • (# contracts x contract size) x (entry – exit price)
  • (3 x 100) x ($16.50 – $15.00)

• If the price rises to $17.00 the trader could exit for a loss around -$7,500
  • (# contracts x contract size) x (exit price – entry)
  • (3 x 100) x ($16.50 – $17.00)

• A 1% margin requirement with 100:1 leverage requires $2,475 of capital
  • (# contracts x contract size x price) / leverage
  • (3 x 5000 x $16.50) / 100

Costs associated With Metal CFDs

Spread:
ThreeTrader offers some of the tightest spreads in the industry. Moreover, spreads on Pro Accounts are even tighter.

Commission (Pro Accounts Only):
We offer competitive commission on all of our products at just $3.50 per trade entered ($7.00 per contract for a round tur of entering and exiting a trade). As we offer mini and micro lots, you can be paying as little as 3.5c to initiate a trade with a raw spread.

Swap:
Swaps are calculated daily and are derived from a countries interbank rate. As metals are traded in US dollars, the US interbank rate is used so swap charges and rebates are also calculated in dollars. Depending on the underlying interbank rate, swaps can be either positive (a charge) or negative (a rebate) depending on if you are long or short an instrument.

You can access this information within MT4 by going to the market watch, right clicking over a market and selecting ‘specification’.

Take note that Wednesday’s charge for 3-days, whereas Monday, Tuesday, Thursday and Friday charge for 1-day and no charges materialize over the weekend.

Trade on margin
Trading on margin allows you to increase your buying power and speculate on markets at a fraction of the underlying price. This can be used to increase your exposure or keep further away from a margin call. With leverage on offer up to 100:1, you can effectively trade 100 ounces of gold for the price of one.

Hedge physical metals
Investors who own physical commodities such as gold or silver can hedge their investment with a CFD. For example, an investor is the proud owner of 100 ounces of physical gold which is stored in a bank vault. Yet they are concerned that gold prices may soften over the coming weeks, so decide to hedge the physical gold by shorting 1 contract of gold (XAUUSD) via our MT4 platform. This way the, regardless of whether gold prices rise or fall, the investor has locked in the value of their physical gold.

Diversify Your Portfolio
With metals sitting in between currencies and commodities, gold and silver are ideal markets to add to your watchlist and increase your trading opportunities.

Competitive Spreads
Trade gold with some of the tightest spreads in the industry with ThreeTrader.

Low margin requirements
Generous leverage of up to 500:1 means margin requirements are low, making gold trading accessible to traders of all levels.

Low commission on Raw Zero Accounts
On Raw Zero accounts, a commission of just $4 per full contract is applied, allowing us to offer an even tighter spread. This is particularly useful for intraday traders who want their stop loss further away from the price action.

No Commission on Pure Spread Accounts
On Pure Spread accounts, commission is not added to the trade, meaning you only pay the relatively tight spread to enter the trade, helping to keep costs low for intraday traders.

Trade Mini and Micro Lots
By allowing our traders to enter the market on mini (0.1) and micro lots (0.01), metal trading is more accessible to traders of all levels. It also allows for finer control over risk management.