Gold CFD Mechanics: Lots, Margin, Spreads, and Overnight Swaps
Summary
This introductory guide explains how gold and other traditional markets differ from crypto trading, using gold-to-dollar CFDs as its main example. It covers lot sizing and contract value, points versus forex pips, bid–ask spreads, fixed instrument leverage, margin calculations, stop-out thresholds, and daily swap charges. It also compares CFDs with crypto perpetual futures and explains that CFDs provide price exposure without ownership of the underlying asset.
The article offers illustrative calculations for exposure, required margin, spread cost, and overnight fees, and emphasizes checking contract specifications because point values and trading costs vary. It describes operational details such as bid-only chart displays and the difference between chart and buy execution prices. The material is an educational overview rather than a tested trading strategy; its examples and platform-specific terms may change, and high leverage can magnify losses.
Key ideas
- Gold CFD positions are sized in lots, so exposure depends on the instrument’s contract size and the chosen lot amount.
- Gold price changes are described in points, while forex pairs commonly use pips; monetary value depends on contract specifications.
- Leverage is fixed by instrument in the described setup, making position size the main way to control exposure.
- Margin, spreads, and overnight swaps all affect the cost and risk of holding a CFD position.
- A CFD tracks an asset’s price without conferring ownership, much like a perpetual futures contract.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.