Spot gold trading common questions

Q1:What is the exchange rate here?
A:Exchange rate is real-time international exchange rate.

Q2:What is "Contract Unit"?
A: "Contract Unit" is the amount of quantity you can buy or sell for trading one lot of Loco London Gold or Loco London Silver. The contract size of one lot of Loco London Gold is 100 ounces while the contract unit of one lot of Loco London Silver is 5000 ounces.

Q3:How much margin do you require for trading one lot?
A: Margin refers to the certain amount of capital required for trading of LLG/LLS as a certificate of holding the orders .
The margin requirement for Loco London Gold: US$ 1,000 per lot
The margin requirement for Loco London Silver: US$ 2,000 per lot
The margin requirement for Loco London Gold: US$ 2,000 per lot
The margin requirement for Loco London Silver: US$ 4,000 per lot afer the close of trading in GEG
platform, in order to handle the fluctuation after the open of trading.


Q4:What is Stop-Profit?
A: Stop-profit, or take-profit/limit, refers to the price that an order must be closed out to realize an investor's profit gained with respect to a trade position. When that market price reaches a stop-profit price, the trade system will automatically close the position. By limiting any further gains, the system is minimizing any possible reversal price movements which may reduce profits for the investor.The stop-profit of a buy position must be placed above the target price, whereas a stop-profit of a sell position must be placed below the target price. The criterion for placing a stop-profit price for LLG/LLS in GEG platform is at least US$2 more or less than the current price. The criterion for placing a stop-profit for LLG/LLS in MT4 platform is at least US$3 more or less than the current price.

Q5:What is Stop-loss?
A: Stop-loss refers to the price that an order must be closed out to minimize an investor's loss with respect to a trade position. When the market price reaches a stop-loss price, the trade system will automatically close the position, limiting any further losses to the investor.The stop-loss of a buy position must be placed below the target price, whereas a stop-loss of a sell position must be placed above the target price. The criterion for placing a stop-loss for LLG/LLS is at least US$2 more or less than the current price in GEG platform. The criterion for placing a stop-loss for LLG/LLS is at least US$3 more or less than the current price in MT4 platform.

Q6:What will the minimum investment be?
A: Minimum contract size:0.5 lot. Initial margin: US$100 per lot. Please contact the customer service for details.

Q7:How to calculate the interest?
A: Interest=(position price * contract unit * interest rate*days)/360. Please note that it should be three days interests if overnight on Friday. The buy rate now is 1.75% and the sell rate is 1.25%, however, the rates are subject to the latest announcement.

Q8:How to calculate the profit/loss?
A: Net Profit/Loss=(Bid Price-Ask Price)*Contract size-Interest-Commission.

Q9:What is a lock position?
A: It refers to the case that a client holds the long position and short position of the same product at the same time in order to enforce risk control policies and improve the risk-resisting ability. If the ratio of prepayment of an account is close to or lower than 20%, the system will lock the position automatically. All investors are reminded to pay attention to your account. If the ratio is approaching to 50% and dropping over the time, please be suggested:
1. to close out all positions or lock the position, in order to control the losses.
2. to meet margin calls in order to make the account back to a safe level.


Q10:What is the differences between Complete-lock position and part-lock position?
A: Complete-lock position refers in the case that client holds the same lots of long position and short position of the same product at the same time. however, if client holds different size of lots such as 0.5 lot for long position and 1 lot for short position, 0.5 left after offset, it will be called part-lock position. There are two ways to lock the position: manual by client or enforced by system. 1/20 of initial margin is required for a locked position.

Q11:Can I close out all positions in a single transaction?
A: Yes, you can close out all positions at the same time. Click the "Close All" button (or select all),and then click "close". Or you can double-click the lots and modify the value for partial close. The "Close All" button is not available in MT4 platform.

Q12:What is Spread?
A: The spread refers to the difference between the bid and ask price. The spread of LLG is US$0.5.The contract unit of Loco London Gold is ounce and about 100 ounces per lot, thus, the spread for trading one lot of LLG will be 0.5*100=US$50. Bid-ask spread of LLS is US$0.04.The contract unit of Loco London Silver is ounce and 5000 ounces per lot, thus, the spreads for trading one lot of LLS will be 0.04*5000=US$200.
Please contact our customer service for spread offer details.


Q13:How can I know the spread has been charged?
A: The bid and ask price of LLG has a difference of US$0.5. When buy/sell to build a position, the position will close based on the bid/ask price. When trading one lot, the "profit/loss" column of the order shows a -50 which refers the spread has been charged.

Q14:How many points of the minimum tick size of LLG?
A: Rise or fall one pip in each bounce of LLG refers that the price goes up or down by US$0.1 per ounce in GEG platform, while US$0.01 in MT4 platform.

Q15:What is margin?
A: Margin refers to the certain amount of capital required for trading of LLG/LLS as a certificate of holding the orders. The margin requirement for LLG is US$1000 per lot. The margin requirement for LLS is US$2000 per lot.
After closing quotation in Friday night(GMT+8) the margin for LLG is 2000USD/lot, the margin for LLS is 4000USD/lot, in order to copy with the wild market fluctuation when the market opens.

Q16:What is the minimum margin level?
A: When holding an unsettled position, the margin may decrease as a result of floating loss. The margin level must remain at above 10% of the initial margin.

Q17:What is leverage?
A: Leverage ratio can be used to measure the magnification of "small broad". The calculation formula of leverage: Market price*contract unit/margin requirement=leverage. For example: if the market price of gold is 1315.00, the leverage=1315.00*100 ounces/1000=131.5 times.

Q18:What is explosive position?
A: Under certain special conditions, the balance in the margin account of an investor is negative. When the market has big changes, if the capitals in the investor's margin account have been used as trading margin, and the trading direction is going against the market trend, because of the leverage of the margin, the position will be locked. The position will explosive because of the change of market and overnight interest.

Q19:What are the Trading hour and clearing hour?
A: Trading hour for spot products(Beijing Standard Time):
From 08:00 on Monday to 03:00 on Saturday(summer)
From 08:00 on Monday to 04:00 on Saturday(winter).
The trading hour for Hong Kong stock exchange is in a time period specified by HKSE. Please visit the official website of the Hong Kong Stock Exchange for details. We provide 24 hours a day service in our platform.
Clearing hour:03:00-03:15 (summer)04:00-04:15 (winter) The trading is suspended and interests is for delivery during this time period.


Q20:What is reorder?
A: Limit orders/pending orders can not be used for reorder purpose, that is when the market price rises, place pending orders to buy new orders or sell limit orders(increase the buy orders) is not allowed. On the contrary, when the price falls, place pending orders to sell or to buy limit orders(increase the sell orders) is not allowed. The orders will be automatically cancelled by the system. whether close the positions or place new orders, stop-loss price/advantaged pending order can not be executed when the market price rises /falls. That is, it can not be used for reorder purpose, but can be used for close or lock the position.


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