| TRADING SPOT METAL CONTRACTS | |
The following is an example of trading spot Metals contracts with Trade Real-Time.
OPENING THE POSITION
You expect that the price of gold is going to increase. Our quote is 623.3/623.8 and you decide to buy 4 contracts at 623.8 (one contract is equivalent to 100 troy ounces of gold). There is no commission to pay on any of our Spot Metals.
INTEREST ADJUSTMENTS
As you have taken a long position, your account is debited to reflect interest adjustments. The interest on your position is calculated daily, by applying the relevant interest rate to the daily closing value of the position.
CLOSING THE POSITION
A few weeks later the price of gold has risen and we are quoting 629.5/630.0. You decide to take your profit, selling 4 contracts at 629.5. Your profit on the trade is calculated as follows:
PROFIT ON TRADE
| Closing level | 629.5 |
| Opening level | 623.8 |
| Difference | 5.7 |
Profit: 4 contracts x 100 oz x $5.7/ oz = $2280
The trade referenced above would have had a corresponding loss associated with it if the trader had taken short position. Trading on margin magnifies both the profit and loss of any trade.
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