Commodities

Spreads

The typical ECN spread for gold and silver is listed below:

Lot Size Specification

One lot of Gold: 100 ounces
One lot of Silver: 5,000 ounces
Minimum required lot is 1 Micro lot, 0.01 lot.
Transactions above the minimum size can be in fractions of a contract.

Order Size

Transactions above the minimum size can be in fractions of a contract.

The minimum size: 0.01 of one contract, the equivalent of 1 ounce of gold, 50 ounce of silver. The maximum size: 50 lots depending on market availability but this may be subjected to slippage.

Precious Metals Pricing

Prices for gold and silver are quoted in USD. If you are trading 1 lot of gold, one cent movement is equivalent to USD 1. Please see examples:

Gold: Opening price is 1700.10 and the price moves up to 1700.11. The profit value is USD 1. Silver: Opening price is 34.70 and the price moves up to 34.71. The profit value is USD 50.

Leverage

Leverage allows you to hold a larger position than the initial cash deposit. Your initial outlay is supplemented to increase the value of your underlying investment. The higher the leverage, the larger the position the trader can execute for the same amount of the initial deposit.

For example, a client using 30:1 leverage could hold a position in the forex market of $30,000 with a margin of $1,000.

Leverage increases the potential of high returns when the market moves in their favour. However, please note that leverage will act against you when the market moves in the opposite direction to your prediction.

Leverage Levels

Different leverage levels apply to different account types.

Margin Requirement

When an investor opens an account with a broker, an initial deposit is required in order to open a position in the market. The required cash deposit will act as a deposit to cover any credit risk. Depending on the agreement, the investor could be able to leverage up to a certain limit.

The margin requirement for a forex trade is calculated using the following formula:

Margin = (Lot Size * Contract Size * Opening Price) / Leverage

The examples below are based on a Standard/Classic account with a leverage of 30:1.

Forex

Margin requirement for one standard contract position in EUR/USD at 1.2500 is calculated as follows:
Margin = (1 * 100,000 * $1.2500) / (30) = $4166

Spot Gold

Margin requirement of one standard contract position in Gold at 1579.01 is calculated as follows:
Margin = (1 * 100 * $1579.01) / (20) = $7895

Spot Silver

Margin requirement for one standard contract position in Silver at 28.70 is calculated as follows:
Margin = (1 * 5000 * $28.70) / (20) = $7175

Note: Interest is not required to be paid on the borrowed amount, but if the investor decides to hold his position overnight, interest will be charged as the rolled over rates on the total positions held.

Margin Call

Margin Call is a level set by a brokerage that defines the minimum amount of money required to trade in the market. When your account falls below the margin call level, you will need to make an additional deposit to maintain your positions. Alternatively, you can close some of your positions to reduce your required margin. At Blackwell Global, Margin Call is set at 80%.

Stop Out Level

In the event you are unable to maintain sufficient funds in your account after hitting Margin Call, and if your account value depreciates to the Stop Out level, all your open positions will be closed automatically to prevent further loss to your capital. At Blackwell Global, Stop Out level is set at 50%.

Swaps

Often referred to as Rollover Interest, swaps are charged when a client holds onto a position overnight . They are due to differentials in interest rates between the base metal and the quote currency.

Blackwell Global undertakes precious metal trading on a “spot” basis. All trades are settled two business days from their inception as per market convention. Swaps are calculated automatically and are applied at 21:59 GMT (Server Time 22:59) on a daily basis. Please note Blackwell Global does not arrange for physical delivery.

Any open positions held from Wednesday to Friday on a trade date basis are charged three times the rollover Interest . These extra payments are to cover the interest that would normally have been charged at the weekend (Saturday and Sunday) when the underlying market is closed.

Forex Rollover Interest