Metals Trade Example

About Trading Spot Metals

Most trading software encompass a full back office function that make it easy for the trader to realize the value of open positions as well as the profit and loss of closed trades.  However, it is important that traders understand how a trade works and how to calculate profits and losses manually.

Mostly Traded with Highest Liquidity

XAU/USD  (Spot Gold  vs. US Dollar)
XAG/USD   (Spot Silver vs. US Dollar)

Primary (base) vs. Secondary Instruments

Similar to FOREX, the base instrument is the reference that defines the contract size.  The profit and loss calculation however is always on the secondary instrument, which in the following cases is the US Dollar:

Instrument PairContract SizeValue of 1 pip
XAU/USD 100 oz. US$ 10.00
XAG/USD 5,000 oz. US$ 50.00

Margin Requirements

In order to buy or sell 1 contract (lot) of Spot Gold or Silver with ICM Brokers, the investor must have a minimum of $1,000 in the account.  Though an initial margin of $1,000 is required, ICM Brokers has no maintenance margin on standard accounts.  In order to guarantee that clients’ accounts do not extend into negative equity, the trading platform automatically closes all positions at the 5% Equity/Margin ratio.

Profit and Loss Calculation Examples

• Buy 5 GOLD at 821.20  |  Sell 5 GOLD at 828.30
   821.20 (open price)   x 5 (lots traded) x 100 oz. (contract size) = 410.600
   828.30 (close price)   x 5 (lots traded) x 100 oz. (contract size) = 414,150
                                                                                                           $ 3,550 (Profit)
• Sell 3 SILVER at 11.05   |   Buy 3 SILVER at 10.85
   11.05 (open price) x 3 (lots traded) x 5,000 oz. (contract size) = 165,750
   10.85 (close price) x 3 (lots traded) x 5,000 oz. (contract size) = 162,750

                                                                                                           $ 3,000 (Profit)

Scroll to Top
Online chat software