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6. Gold futures

What is actually traded

A spot gold quote reflects the metal's price under particular settlement terms. A broker's XAUUSD ticker can represent an OTC product or CFD; the ticker alone does not prove access to a COMEX exchange contract. Read the legal contract name and specifications.

GC and MGC are COMEX gold futures within CME Group. They have a contract month, standardised size and delivery mechanisms. A CFD is a provider contract with its own lot size and conditions. Tokenised gold adds issuer, custody and token-circulation rules. Do not substitute one of these instruments for another without recalculation.

Check the broker's availability, licences, eligible countries and client requirements separately. This course does not recommend a broker or assume that every user can open such an account. If access is unavailable, the exercise remains a calculation on paper.

GC and MGC specifications

Checked against the official COMEX Rulebook, chapters 113 and 120. Price is quoted in US dollars per troy ounce. The minimum price change for both contracts is 0.10 dollars per ounce. Multiply that increment by the contract size to obtain the monetary tick value.

Tick value is neither a fee nor margin. A minimum position of one contract cannot be divided into a convenient 0.2 contracts. If the risk of one MGC exceeds the budget, the formula's answer is zero contracts, not rounding up.

Step-by-step calculation

For a linear future, gross long P&L = n × U × (X - E), where n is contract count and U is ounces per contract; a short reverses the price difference's sign. Price and every level must refer to the same month and contract.

MGC example. Practice long: E = 3 000, S = 2 997, T = 3 006. These are hypothetical levels, not a market quote on the publication date. Stop distance is $3/ounce = 30 ticks. One MGC: risk to stop $30; gross result at target $60. One GC at the same levels: risk $300 and result $600.

With a $100 budget and hypothetical total costs of $4 per contract, including an execution reserve, the modelled risk of one MGC is $34. Maximum n = floor(100 / 34) = 2. Calculated loss $68; three contracts would produce $102 and breach the budget. For GC, n = 0. The $4 cost is illustrative: check broker, exchange and clearing charges separately.

Margin and daily settlement

Futures margin is collateral determined by the exchange, clearing and broker. Initial, maintenance, intraday and overnight requirements can differ and change. Low intraday margin does not reduce tick value or guarantee that a position can be held after the preferential period ends.

Sizing by risk and checking sufficient funds for margin are separate tasks. A plan may fit R but fail the collateral requirement. Conversely, available margin for several contracts does not mean their stops fit your risk budget.

Changes in an open future's value are reflected through variation settlements. A broker can demand more collateral or reduce the position forcibly. Do not assume that your stop cancels margin obligations.

Expiry, delivery and rolling

GC/MGC carry delivery obligations. MGC's ACE mechanism relates to a share in a 100-ounce warrant; it is not a promise to send a small bar to your home automatically. Do not hold a contract into delivery dates without understanding the procedure.

Under the checked rules, trading terminates on the third-last business day of the delivery month. However, First Notice Day and a broker's mandatory closing deadline may be earlier. Determine the practical deadline from the specific month's calendar and broker rules, not a general sentence in a textbook.

Rolling a position usually means closing one month and opening another. Month-to-month price differences, fees and liquidity add effects. A continuous chart may contain adjustments and differ from the executable contract price. Use actual contract series and an explicit rolling policy for testing.

Sessions and execution

At the time of verification, CME states trading from Sunday to Friday at approximately 17:00-16:00 Chicago Time with a daily one-hour break. Holidays and special schedules change the session. Conversion to Kyiv time depends on the date: US and European daylight-saving transitions do not coincide. Do not permanently assume one fixed offset.

Before a practice or real observation, check the calendar, active month, book depth and spread. COMEX data may be delayed or require a subscription. Verify a provider's "live" label against its terms and update time.

Macroeconomic releases and the opening of an active session can bring sharp changes. A stop defines an exit rule but does not guarantee execution exactly at its level. A stop-limit can remain unfilled. Do not treat convenient chart fills as proven execution in a calculation.

Gold workshop

Scenario 1. Long 1 MGC at 3 000; exit 3 001.2. Difference 1.2 = 12 ticks; gross result $12. For 1 GC the result is $120. Do not confuse a 1.2-dollar quote movement with a 1.2-dollar result per contract.

Scenario 2. Short 2 MGC at 3 000; stop 3 004. Planned gross loss: 2 × 10 × 4 = $80. If the stop executes at 3 004.3, gross loss is $86. Including $4 total hypothetical costs on each contract, the loss is $94.

Scenario 3. Budget $25; MGC E = 3 000, S = 2 997, before even considering additional costs. One contract risks $30. The permitted count is zero. More leverage or a broker offering lower margin does not fix the mismatch in money risk.

Before acting. Full name and month; U; increment and tick value; direction; stop and trigger; n; costs; current margin; session; First Notice/Last Trade; broker cutoff; and any data delay. Radar is not a source of gold signals in this exercise.