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The Ins and Outs of Gold Futures Margin

September 9, 2019 by Daniels Trading| Futures 101

For active precious metals traders, the gold futures contracts listed on the Chicago Mercantile Exchange (CME) are the industry standard. Offering robust liquidity and consistent volatility, they are premier products for anyone interested in gold futures margin trading. From intraday scalping to swing trading strategies, bullion market participants rarely find the need to look outside of the offerings listed on the CME.

Full-Sized COMEX Gold on the CME

Initially founded in 1933, the Commodity Exchange Inc. (COMEX) offered gold futures for a long time. It merged with the New York Mercantile Exchange (NYMEX) in 1994, and was later acquired by the CME. COMEX gold continues to be a global leader in the precious metals trade.

The full-sized COMEX gold contract (GC) is the derivatives market benchmark for bullion. Accessible on the CME Globex, COMEX gold futures offer unparalleled liquidity, accounting for volumes equivalent to 27 million ounces daily.

When it comes to applying leverage, the gold futures margin local to the GC contract offers second-to-none market exposure. Here are the contract specs:

Symbol Size Minimum Tick Tick value:
GC 100 troy ounces $0.10 $10

In relation to the size of GC, brokerage-independent margin requirements enable traders of moderate capitalizations to participate in the market. As far as full-sized contracts go, the gold futures margin of COMEX gold is less than competing issues, specifically those listed on the Intercontinental Exchange (ICE). Although margins vary from broker to broker, here are solid ballpark figures:

Symbol Initial Margin Maintenance margin Intraday margin
GC $4400 $4000 $1500

Given enhanced liquidity and a near 24/5 business week, the GC contract offer traders many opportunities. Although holding open positions through the daily close is capital intensive, executing intraday strategies is possible with as little as $2000. Depending on your resources and goals, trading COMEX gold futures on the CME may be a great way to engage the precious metals markets.

Our blog has critical trading information perfect for new and experienced traders, hedgers, producers, and investors.

Reduced Exposure: CME E-micro and E-mini Gold

For smaller retail traders, the size of standard COMEX gold futures may make them a nonstarter. The $10 tick value and $4400 maintenance margin are daunting obstacles, effectively taking the contract off the table. If trading full-sized bullion is not realistic given your resources, don’t worry. The CME has several reduced-size products that may be more suitable for you.

CME E-mini Gold

The E-mini gold contract offers traders a smaller contract size, yet an enhanced per-tick value. While trading volumes are modest in comparison to its standard counterpart, many traders look to E-mini gold for a strategic edge. Here are the specifications:

Symbol Size Minimum tick Tick value
QO 50 troy ounces $0.25 $12.50

Due to the greater minimum tick value, the E-mini contract is not subject to price action typical of standard GC. This enables brokers to offer reduced gold futures margin requirements, as seen below:

Symbol Initial margin Maintenance margin Intraday margin
QO $2200 $2000 $1100

CME E-micro Gold

For the ultimate in granularity, the CME’s E-micro gold futures offer vastly reduced contract sizes and tick values. Similar to the new Micro E-mini equities products, E-micro gold is 1/10th the size of the standard GC contract, making it tradable for only a few hundred dollars. Here’s a quick look at the specs for E-micro gold:

Symbol Size Minimum tick Tick value
MGC 10 troy ounces $0.10 $1.00

In concert with the smaller contract size, E-micro gold is subject to vastly reduced margin requirements:

Symbol Initial margin Maintenance margin Intraday margin
QO $440 $400 $220

The strategic implications of the E-micro’s tick values and margin requirements are extensive. Swing trading, intermediate-term investing, and multicontract strategies are all possible, even for those traders with limited capital.

Getting Started with Gold Futures Margin Trading

If you’re an aspiring precious metals trader, then the gold futures products available on the CME have something for you. No matter if you’re a high net worth investor or a small cap retail player, the GC, QO, and MGC contracts can fulfill your bullion trading needs.

For more information on accessing these exciting markets, check out the brokerage service suite available at Daniels Trading. From self-directed to broker-assisted options, Daniels has everything you need to engage gold on your terms.

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Filed Under: Futures 101

About Daniels Trading

Daniels Trading is division of StoneX Financial Inc. located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading was built on a culture of trust committed to a mission of Independence, Objectivity and Reliability.

Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

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Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

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