Derivatives markets

Products & leverage for professionals

Other ways to buy gold include financial derivatives, such as futures and options contracts. Derivatives are contracts between two parties for speculation or hedging. Using derivatives to invest in gold has tended to be best for professional traders speculating on the price of gold because you suffer from:

  • Excessive amounts of leverage to gold prices
  • Problematic volatility above the live gold price moves
  • Complications and delays of opening professional brokerage account
  • Owning a derivative not physical gold bullion
  • Broker and default risk

Individual investors have tended to avoid derivatives, finding them complicated and difficult to trade. New gold investments have increased choice for investors and provided more secure options that are easy to understand when you simply want to buy gold bullion.

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