Gold And Silver Trading Futures Contracts

By Dorotee Joe

There are many reasons to invest in precious metals like gold and silver. These types of investments can be a safeguard against inflation, can be very useful for risk diversification in a portfolio of multi-asset, are a valuable hedge against emergencies, and are safe and liquid. The term “precious metals futures contract” means a legal contract to buy or sell a specific weight of gold or silver, the agreed date in future at an agreed price. Futures contracts are characterized by exchanges based on quality, quantity, time and place of delivery. Hedger to use this contract as a means to control their risk of price on a purchase or sale under the metal. Can manage the risks associated with adverse price movements on the spot market. Coffers of banks, factories, mines and jewelers are some examples of conservative. For speculators, which offers the opportunity to participate in markets without any physical media. Examples include speculative hedge funds, individual investors, advisers and commodities trading. The investor can choose two different positions – a long (buy) and the short position (sell) position. The first type is required to accept physical delivery of metal, while the second type refers to the obligation to make delivery. Futures contracts are mostly offset before the delivery date. This happened when the investor seeks a long position short position on the contract, therefore, the original long position must be eliminated. The main advantages of futures contracts for precious metals: • lever provides greater financial flexibility and financial strength in relation to trading of such products. • No counterparty risk, as the futures clearing services are supported by businesses. • Easy to go long or short position with great flexibility to protect your money • uncertaintiesGold cover price and futures contracts are traded in dollars per ounce of silver. Futures are traded as COMEX and eCBOT. There are also mini-futures contracts in eCBOT. This article was written for www. orientfinance. com. Orient Financial Brokers (OFB) SLP leads in FX, futures and products in the Middle East. OFB offers 24 hours of Internet services on-line trading to cope with thousands of securities.