Trading gold

Discussion in 'Metal Futures' started by yabz, Nov 8, 2005.

  1. yabz

    yabz

    What is the best way to trade the gold price?

    Gold shares have greater volatility than the actual spot price, which gives you more profit potential.

    NEM? Seems to have the best liquidity.

    XAU?

    Or gold futures? Options on gold futures seem interesting but I don't know where to start...
     
  2. sprstpd

    sprstpd

    If you want to stick with equities, try GLD.
     
  3. GLD will track gold price without any event risk

    as it is ETF not a mining company

    yes the XAU components usually follow spot gold price movements but have that event risk that
    all stocks have .

    ecbot has mini gold futures YG that might be of interest as they trade longer hours than any equity and track the COMEX as well as ZG traded products on the ecbot

    futures though are a different animal than stocks
    and are more leveraged as well as treated differently come tax time.

    one more possibility is SSF ( single stock futures )
    but that limits you to whatever mining names they trade there
     
  4. YG - ECBOT gold mini contract.
     
  5. Which is the product for Gold to trade options. Thanks
     
  6. I'd hate to think how illiquid the metals options markets are -- I think GLD and YG are best for individual accounts, depending on how fast you like things.

    Trust me, YG will give you all the leverage you need to double up and/or blow yourself out. :)
     
  7. yabz

    yabz

    That's why I usually trade NEM. The options seems to be the most liquid for some reason, more so than XAU. It has become, perhaps, the preferred instrument for gold speculators.

    Neither YG or ZG seem to have any options available on them. I trade options exclusively.

    The problem with GLD would seem to me to be insufficient volatility. The gold price fluctuates on average 10% a year, so for the purposes of speculation, the commission and margin requirements make it poor value. For a long term investment in gold I think I'd prefer gold bars.

    Thanks for all the replies....
     
  8. There should be some more conservative options strategies for low volatility market such as gold, no?
     
  9. I frequently trade metal futures and options. Few equity options are as liquid as gold or silver options, and COMEX MMs will quote bid/offer for option or futures spreads.