What is the risk of gold futures trading? What is included?
As we all know, all investments are risky. There is no doubt that the higher the risk, the greater the return. Many investors will choose gold futures trading when they invest, but for the investors who enter the gold futures market, in the trading process, they need to analyze the risk of each trading link, in order to regulate the trading behavior and reduce the risk. So, what is the risk of gold futures trading? How should gold investors avoid it?
1、 The risk of brokers
When investors invest in futures, they should first choose a reliable futures brokerage company. Therefore, when choosing a futures brokerage company, customers should understand its scale, reputation and operating conditions, select a company with strong strength and good reputation, sign a commission contract for futures brokerage business, and go through the procedures of opening an account and deposit.
2、 Liquidity risk
The risk of liquidity is caused by the poor liquidity of the market, which makes it difficult for futures trading to complete quickly, timely and conveniently. This kind of risk is particularly prominent when customers establish positions and close positions.
For example, when establishing a position, it is difficult for traders to enter the market at the ideal time and price to form a position. The hedger cannot establish the optimal hedging portfolio. When the position is closed, it is difficult to close the position by hedging, especially when the futures price shows a continuous unilateral trend or is close to delivery, and the market liquidity drops, which makes the traders unable to close the position in time and suffer heavy losses. In order to avoid liquidity risk, customers must study the main components of both sides to avoid entering the unilateral market dominated by unilateral forces.
3、 The danger of qiangping
Because the futures brokerage company must settle the profit and loss of the dealers according to the settlement results provided by the exchange every day, if the futures price fluctuates greatly and the margin cannot be replenished at the specified time, the dealers may face the risk of forced liquidation.
In addition to the strong balance caused by insufficient margin, when the total position of the brokerage company entrusted by the client exceeds a certain limit, the brokerage company will be forced to carry out liquidation, which will have an impact on the strong balance of the client. Therefore, customers should always pay attention to their capital situation when they trade.
The above three points are the three common risk points in the process of gold futures trading. They are also the comparison between the futures market and other investment markets. The difference between the two is more obvious. Every investor must strictly control all the risk points in order to avoid unnecessary losses. New investors should pay special attention to this link.