Agreeing today, settling later
A contract is an agreement to buy or sell a set amount of gold at a set price on a future date. The COMEX contract in New York represents 100 troy ounces.
Futures require only a deposit, which creates : small price moves produce large gains or losses relative to the deposit. Most futures are closed before delivery.
Key takeaways
- Futures are standardised future-dated contracts.
- Margin creates leverage and magnifies risk.
Knowledge check
A standard COMEX gold contract is…
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