Tips for spread betting on gold
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Written by Trader Hideout Editor
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Monday, 08 June 2009 15:01 |
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Financial spread betting first started in 1974 and spread betting on gold was one of the first areas where spread betting became popular, probably because of its inverse correlation with the equity markets.
Another reason people like to spread trade on gold is that it offers the advantages of speculation without actually accepting ownership. Unlike stocks and shares, you cannot receive dividends by owning gold and indeed owning shares in gold can actually cost you money due to the insurance and storage costs.
Here are a few tips for spread trading in gold:
• Remember to steer opposite to the media. By the time the headlines are telling the public that gold is a good buy instead of holding dollars, it might be time to look at going short
• Beware that gold can be more volatile than some markets, so spend a little longer getting to understand the gold market than perhaps you would with others. Like currency, the gold market is open 24 hours
• Always check the tick size because some spread betting companies will use a tenth of a dollar per troy ounce whilst others will use a tick size ten times larger. This is important to check your exposure to loss
As gold is so volatile, the best tip is to always double check your exposure and know what you’re doing as spread trading on gold is not for the beginner.
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