Trading Examples

Trading Examples for Spot Metals

In this section some simple examples will be given in order for traders to understand how a trade works and how to calculate profits and losses manually. The MetaTrader 4 trading software which is used at ICM Capital includes a full back office function that makes it easy for the trader to appreciate the value of open positions as well as the profit and loss of closed trades.

Mostly Traded with Highest Liquidity
XAU/USD (Spot Gold vs. US Dollar)
XAG/USD (Spot Silver vs. US Dollar)

Primary (base) vs. Secondary Instruments

When talking about precious metals the same principal applies as to Forex. The base instrument is the reference that defines the contract size. The profit and loss calculation however is always on the secondary instrument, which in the following cases is the US Dollar:

Instrument Pair Contract Size Value of 1 pip
GLD./USD 100 oz. US$ 10.00
SIV./USD 5,000 oz. US$ 50.00

Margin Requirements

In order to buy or sell 1 contract (standard lot) of Spot Gold clients require a minimum of 800 USD in their account or 2,000 USD to trade 1 lot of Silver. When this is the case no maintenance margin will be applied to standard accounts. ICM Capital offers monitoring the stop out level in real time and the platform automatically closes all positions at 0% stop out level (Equity/Margin). ICM Capital offers negative balance protection which means in an event where the accounts equity becomes negative due to the stop out, the company will not demand for the debit balance, thus guaranteeing your risk is limited.

Profit and Loss Calculation Examples

Buy 5 GOLD at 1750.30 | Sell 5 GOLD at 1758.80

1750.30 (open price) x 5 (lots traded) x 100 oz. (contract size) = 875,150

1758.80 (close price) x 5 (lots traded) x 100 oz. (contract size) = 879,400

$ 4,250 (Profit)

Buy 5 GOLD at 1652.5 | Sell 5 GOLD at 1646.7

1652.5 (open price) x 5 (lots traded) x 100 oz. (contract size) = 826,250

1646.7 (close price) x 5 (lots traded) x 100 oz. (contract size) = 823,350

$ 2,900 (Loss)

Buy 3 SILVER at 33.96 | Sell 3 SILVER at 34.18

33.96 (open price) x 3 (lots traded) x 5,000 oz. (contract size) = 509,400

34.18 (close price) x 3 (lots traded) x 5,000 oz. (contract size) = 512,700 

$ 3,300 (Profit)

Sell 3 SILVER at 31.53 | Buy 3 SILVER at 31.69

31.53 (open price) x 3 (lots traded) x 5,000 oz. (contract size) = 472,950

31.69 (close price) x 3 (lots traded) x 5,000 oz. (contract size) = 475,350

$ 2,400 (Loss)

CFDs and Spot FX are leveraged products. Trading CFD's or Spot FX carries a high risk to your capital and can result in losses that exceed your deposits. Read More
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