Futures:
Margin requirements for gold futures (Symbol: QM) are significantly lower than that of equities at $600 per $10K/notional value; however, commissions and exchange fees are charged on trades. Because futures trading tends to be short term, commissions that are charged on a “round trip” basis could quickly add up to become a significant cost of doing business. Futures traders in gold, however, may find it beneficial to be able to participate in pure gold play with significantly higher leverage then equities.
In addition, they have access to electronic platforms that trade after hours, and enter into standardized contracts with uniform tick price movement. On the flip side, futures traders run the risk of seeing their losses exceed the amount of the initial capital allocated to the trade, and in some cases may be required to make additional deposits into their accounts.
Learn what is really going on in the futures investment pits.
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