Gold and silver trading

Discussion in 'Commodity Futures' started by Vortex, Jan 18, 2012.

  1. Vortex



    We are looking into trading both gold and silver.
    This may sound like a total newbie question, but what is the most efficient way to trade this in context of liquidity, spreads and volume?
    I have always been under the impression the best way to trade this is in the futures market, specifically CMX (CME). I see Saxo is offering this trading, what exactly is it that you trade when you trade with them?
    Is there something like a spot market for these?
    I looked at the volumes traded for Silver on CME and it seems to me very little for all the fuss I hear about Silver trading and Silver traders!

    Sorry for the dumb question but thanks for the help!
  2. Google SI/SLV and GC/GLD etf futures arbitrage. Both vehicles have solid liquidity and tight spreads. You can reliably trade GLD for size because any deviation from GC that you may experience will be arb'd away almost immediately.

    -The bid/ask on front gold futures is usually .10 - .20, $10-$20 per CME contract (LIFFE gold is trash).
    -The bid/ask on GLD is usually .00 - .01, $0 - $1 on 100 shares.

    -Futures offer better leverage; cheaper to short.
    -GLD offers better spread, less leverage, expensive to short.
  3. Vortex


    Thank you for that. So the ETF is essentially participating in shares (equities) which I assume are gold-mining shares. So it is not "pure" gold, but as good as?

    What about trading XAU and XAG similar to spot forex? I see it is widely offered now - surely that must be even better liquidity and spreads? One can choose to trade it against AUD, EUR, HKD and obviously USD. Any experience with those?

    Thanks again for the kind help. :)
  4. Sorry, no experience with XAU/XAG. However if there is an extra leg in the trade for the market maker needing to trade it against different currencies, then I imagine that extra cost is built into the bid/ask or depth somehow.
  5. Vortex


    Aaaah, good point.

  6. ==============
    Good points,ARB;
    I could agree with it 100%

    Except since op named it a newbie question.;
    so no, i wouldnt call any derivative''cheaper to [go]short ''or
    or cheper to [go] long.Mainly because bid /ask is the least of a newbie traders problems.LOL

    I know some new traders made a killing in buying gold stock options [calls]in a good uptrend.

    NEM , GLD,SLV is plenty liquid[SLV,DGP probably mostly];
    dont know if NEM still pays dividends still or not. NOT a a prediction, nor would DGP be a good idea to ''learn on''

    Enjoyed the post/original question.Cash silver/gold /copper dealer said silver is a sell @ 32 & below $32. Not a prediction.Wisdom is profitable to direct:cool:

    Even if op is a fund manager??;
    i would reply the same except not mention DGP.:D
  7. =============
    Mr V-TEX
    Good question.
    yes, plenty of good silver, gold spot markets in USA, TX:cool:

    Excuse me for asking another ''dumb question '';
    is your CME '' silver volume on'',near your bottom of chart .LOL. [a joke, actually, even on volume month contract.]

    Actually , to tell truth , SLV,siver buy volume is quite weak,
    compared to 2011. Silver Sell volume,2012, is notable weaker also .

    So let me put it this way.
    Jim Rogers/investor/fundmanager[not a trader] did NOT really mention silver,like he did gold, much in his Hot Commodity book:cool: Except for silver % in ;
    1] GS commodety index
    2] DJ commodity index
    3 ] Rogers commodity index
    4]Forgot the 4th index.

    Not a prediction;
    may see SLV,silver volume up tick a tad around $ $22-$!8/+.
    Silver Standard Resource, Argintina mine, noted that was thier cost in 2010+/.Not a prediction, simply wisdom /wise probabilities
  8. Vortex


    Hello Murray!

    Thanks for all that - you may say I am a newby, even though I am a fund manager! :D We are highly experienced in spot forex for the last 15 years, but I am totally out of my depth with gold, silver, ETF's and futures (to a lesser degree). So I do need some help. Err, what is DGP, for example?

    It is essential for our approach to only trade instruments which offer near-24 hour trading to avoid gaps between sessions (days). Are ETF's in this category?

    PS: I have noticed your Turtle-handle, I assume trend follower? I tip my hat, sir.
  9. Vortex I am for hire if you need a commodity risk manager in Zug/Geneva/Zurich/Berne.
  10. Vortex


    Ah, thank you ogarbitrage. However, we are highly systematic in our approach and regardless of instruments our systems allow us to simply add, and add, and add without any impact on the two founding partners.
    You are most certainly in the correct area for your speciality, especially Zug.

    Best of luck to you.
    #10     Jan 19, 2012