I must be missing something. On Oanda, Units Available Calculator, at 50:1 Margin, $12 buys/sells 1-unit. 1 unit is worth .01 (cent) USD per point/pip. If an ounce of gold is selling for $554, then one tic/pip up or down is also worth $554. Isn't this correct? I'm starting to feel like a beginner again. Without ridicule, could somebody point out what I am not seeing here? x
If you sell 10k units (1 mini) of gold, Oanda pays you 24.20% per year to you for the carry currently.
I opened a simulator account on Oanda... Silver's session high so far was $10.4222. It's now $10.3200. That's over 1000-pips!! :eek: That's pretty volatile. EUR/USD only had a 30-pip swing in the same time frame. Exchanges
XAU only has an interest rate (in this case) of 0.5% / USD 4.1%. That's not so hot. There're currencies that pay more than that. So far this gold and silver offering by Oanda is pretty much useless. Spreads are: Gold = 80-wide. Silver = 300-wide. And if you buy either metal you really get walloped paying interest. In the realm of exotics. South African rand = 125-wide. Thai baht is 5-wide! Saudi riyal is only 4-wide! Hungarian forint / euro = 100-wide. Oanda's calculator is showing 10000 units of gold sold / USD held for a year as paying $199,332. $1,000 worth of gold (sold) @ 50:1 pays $1794 interest for a year. Silver's less at $1300. But $1,000 worth of AUD/JPY pays $2500 interest. NZD/JPY is much higher than that but Oanda doesn't offer it. :-/ Go figure. x
I think there does exist a product like spot brent oil or spot natural gas, but it's not available on EBS or Reuters (the platforms that do the most interbank currency volume). Therefore it would take a lot more efforts and technical difficulties for Oanda to offer oil, than it takes to offer XAU/USD and XAG/USD. For spot gold and silver, they only needed small changes to their platform, because gold is traded on the same platforms they use to offset their exposure. I don't think they will offer any new products (except other currencies maybe) anytime soon. Other products aren't necessary either in my opinion. They should stick to their core business (currencies) and if you'd like to trade crude oil, wheat, lumber, bellies, juice or bonds, just open a futures account and trade the futures
Silver's volatility does seem alot when considered as a percentage, but it's a 200 pip spread for a 1000 pip trade. I'd take the 1.5 pip spread on a 30 pip trade any day