What's the difference between gold futures and London gold? What are the disadvantages of gold futures investment?

gold futures

What's the difference between gold futures and London gold? What are the disadvantages of gold futures investment?

1. Transaction time

At present, the trading time of domestic gold futures is divided into three periods: 9:00-11:30 a.m., 13:30-15:00 p.m. and 21:00-2:30 a.m. from Monday to Friday. The trading time of London gold is from 6:30 a.m. on Monday to 3:30 a.m. on Saturday (winter period: 7:00 a.m. on Monday to 4:00 a.m. on Saturday), during which investors can trade continuously for 24 hours.

Thus, compared with other products, gold futures have certain advantages in trading time, but London gold has more obvious advantages in trading time.

2. Transaction mode

Gold futures adopts the two-way trading system of T + 0, which is very similar to London gold in this point. However, London gold exchange has no delivery period, so investors can close their positions at any time; while gold futures has delivery period, so investors' positions must be closed before the expiration of the contract, otherwise physical delivery will be carried out, which limits investors' trading freedom to a certain extent.

3. Investment cost

Although both of them belong to margin trading, but their leverage ratio is different, the cost that investors have to pay is also different. The leverage of gold futures is generally 15 times, while that of London gold is as high as 100 times. Therefore, the cost of gold futures is much higher than that of London gold when trading commodities of the same value.

1. Gold futures in different stages of listing operation, the margin collection standard is different. The time when investors choose to enter the market is closely related to the margin ratio. At the same time, in the process of trading, if investors do not add margin in time, they are likely to be forced to close positions by the system.

2. Gold futures investment has a limited contract time. If the investor does not close the position before the expiration of the contract, it will be physical gold delivery after the expiration, which is not in line with the interests of ordinary investors. Because investors invest in gold futures in order to get profit margin, not physical gold.

3. Gold futures investment risk is relatively large, so it needs strong professional knowledge and accurate judgment of the market trend. At the same time, there is a strong speculative atmosphere in the market, and investors are often reluctant to get away because of the speculative psychology, which eventually leads to unnecessary losses.

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