Commodities Example
Close

Your feedback is important to us!

How would you rate our site on a scale of 1 to 5, 5 being the highest and 1 being the lowest?

  • 1
  • 2
  • 3
  • 4
  • 5

Please enter your feedback in the box below and tell us what you think !

Refresh

Trading

Commodities

GKFX Prime is offering our clients commodity trading services from over a hundred global markets

Commodities Example

We will use gold, GOLD, as an example of how to trade commodities.
First determine the standard lot size for GOLD.
The standard lot size for GOLD  is $1 per 0.1.

If you do not know the standard lot size you can look it up on our Market Information Sheets
The price of GOLD is measured in movements of 0.1. Since a tick is a unit used to measure the smallest possible price movement a product can make and since 0.1 is the smallest amount GOLD can move up or down we will refer to a movement of 0.1 in this example as a tick.
With GKFX Prime you can trade from 0.10 lots which represent the minimum lot size.
This is 0.10 lots  x  $1 per tick, which is $0.10 or 10 cents per tick.
If you bought GOLD with a lot size of $0.10 you would have made $0.10 for every tick the price of GOLD went up.
If you sold GOLD with a lot size of $0.10 you would have made $0.10 for every tick the price of GOLD went down.
If you bought GOLD at $1200.0 and the price moved up 5 ticks to $1200.5 you would have made a profit of 50 pence because $0.10 per tick x 5 ticks = $0.50, or 50 cents.
If you sold GOLD at $1200.0 and the price moved down 50 ticks to $1150 you would have made a profit of $5 because $0.10 per tick x 50 ticks = $5.
Alternatively if the prices in the examples moved in the opposite directions you would have lost the amounts shown above.


 

RISK WARNING

All financial products traded on margin carry a high degree of risk to your capital. They are not suited to all investors and you can lose more than your initial deposit. Please ensure that you fully understand the risks involved, and seek independent advice if necessary. See our full Risk Warning on our Terms of Business and our Privacy Policy.