Calculating Spot Gold Returns
(Selling Price - Bid Price) x Contract Unit x Contract Quantity x USD or HKD exchange rate +/- interest – transaction fees = profit or loss
For a customer who buys and sells 2 lots of Loco London gold within the same day at a bid price of US$1,650 per ounce, a selling price of US$1,665 per ounce and a basic deposit of US$2,000 (US$1,665 - US$1,650) x 100 oz x 2 = US$3,000
In leveraged transactions, a larger contract can be financed by a smaller capital in order to increase profits
Currently, a majority of gold trading companies offer the maximum leverage ratio around 100 times to their customers.
Customers can control the leverage ratio
Customer may increase the principal, e.g. deposits of US$10,000 to buy one lot of 100 ounces of gold contract, the price is US$1,700 per ounce of gold. The contract value for one lot of 100 ounces of gold is US$170,000, the leverage ratio is 17 times.
Customer can set their own leverage ratio to suit their investment strategy and objective.