|
|
 |
| Welcome to AFA Markets ... |
Example: Buying Spot Gold
|
|
 |
Trade spot metals 24 hours a day on tight spreads:
|
|
|
You expect that the price of gold is going to increase. Our quote is 623.5/624 and you decide to buy 4 contracts at 624 (one contract is equivalent to 100 troy ounces of gold). |
|
|
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.
|
|
|
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:
|
|
| |
Closing level |
629.5 |
Opening level |
624 |
Difference |
5.5 |
Profit: 4 contracts x 100 oz x $5.5/ oz = $2200 |
To calculate the overall result on the transaction you would also have to take into account the interest adjustments.
|
|
|
|
|
|
