What are the advantages of spot gold trading leverage?

As the most mature investment product in the precious metals market, spot gold has always been favored by professional investors because of its high leverage. What are the advantages of spot gold trading leverage?

Everything starts with knowing leverage

Leverage in the financial investment market actually refers to a way of leveraging large amounts of investment with smaller funds, and its purpose is to increase the utilization rate of funds.

For example, in the real estate transaction, investors pay a down payment equivalent to 50% of the total property price, and they can own the property. This is equivalent to buying the property with twice the leverage. Of course, the mortgage bank needs to pay in the process Certain interest is used as the service fee for this investment.

Leverage ratio of spot gold

The leverage of spot gold is as high as 100 times. To make a standard contract of 100 ounces, investors only need to pay a deposit of 1,000 US dollars. In other words, investors only need to pay the price of 1 ounce of gold to trade a 100 ounce gold contract. The full investment profit of the contract.

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Managing leverage can reduce risk

The high leverage of spot gold determines that it is a high-yield variety, but there is also an equal risk hidden behind it. Therefore, if a new investor does not manage leverage well and trades against the trend, the account is prone to large-scale losses. Some investors will complain about it, thinking that spot gold is a pit product.

In fact, the risk of spot gold trading is completely controllable.

It has up to a hundred times leverage, which does not mean that investors need to use it all. Investors can reduce the leverage of transactions by controlling the number of transactions (such as 0.1 lot) and positions. In addition, they can also use stop losses Control the maximum loss of each transaction.

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