Post by
TRRG on Sep 13, 2014 1:51am
Extreme leverage !
At $1250 gold, a single 100-ounce gold-futures contract controls $125,000 worth. Yet the maintenance margin on US gold futures is now just $4600. Thus traders running at maximum margin have leverage to gold of 27.2x! That is astoundingly risky, as a mere 3.7% gold move against these guys would wipe out literally all of the capital they bet. For comparison, stock trading is legally limited to 2.0x leverage.
Comment by
baranja on Sep 13, 2014 9:39am
Right, and when you add the fact that oll of hose god-futures contracts are not backed by physical metal (or just small percentage) you see how this is all one giant fraud of astronomical proportions.