3 Min
Lesson

1-Ounce Gold futures - Product Overview

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What are 1-Ounce Gold futures?

The 1-Ounce Gold (1OZ) futures contract is a pocket-sized product that delivers full-sized potential, offering a new way to trade the gold market. 1OZ is designed to give traders more precise and flexible control over their portfolios. 1OZ futures contract is just 1/10 the size of a Micro Gold contract and 1/100 of a Gold futures contract, making it accessible to all gold traders, including those seeking a more budget-friendly entry point.

With gold prices soaring to all-time highs in recent years, this contract may appeal to market participants looking to enhance their trading power with less upfront capital. The 1OZ futures contract offers precise market exposure by closely tracking the spot price of gold.

Trading example

To illustrate 1-Ounce Gold futures’ capital efficiency, consider this trading example.

If Gold futures trade at around $2,700 per troy ounce and a trader wants to express a bullish view, they can purchase a 1-Ounce Gold futures contract with roughly $115 of margin.

This $2,700 position is 23 times greater than the margin requirement.

Trading a similar position with ETFs involves purchasing approximately 11 shares of an SPDR GLD ETF, which can be purchased using a broker. There are typically less capital efficiencies when trading ETFs.

The position is the same size at $2,700, but the upfront capital is vastly more at $2,700.

Understanding pricing and settlement of 1-Ounce Gold futures contract

The 1-Ounce Gold futures contract is cash-settled, measured in units of one troy ounce and priced in U.S. dollars and cents per troy ounce. The minimum price movement, or tick size, is $0.25. 1-Ounce Gold futures are traded on Globex and can be listed for any February, April, June, August, October or December within the next two years.

Trading will end on the third-to-last business day of the month before the contract month. A new contract month will be added on the last business day of the month after the current contract expires. For block trades, transactions for 25 contracts must be reported within a 15-minute window.

Benefits of 1-Ounce Gold futures

  • Follow spot price closely: Track the price of gold more precisely, as 1-Ounce Gold futures are directly tied to the spot price, offering accurate market exposure.
  • Flexibility to react to market moves: Market participants can act on market moves instantly, whether going long or short, with the flexible and agile 1-Ounce Gold futures contract.
  • Seamless trade execution: Trade with confidence, as 1-Ounce Gold futures build on the proven liquidity of GC futures and MGC futures, facilitating quick and efficient position management.

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