Trading Gold using Binary Options

Gold is one of the world’s most popularly traded commodities, but many people stay away from it simply because they don’t want to hold it. It’s a legitimate concern; who wants to keep a safe full of bullion in their closet where it can take up a lot of room while it just sits there? Luckily, there are plenty of ways that you can profit off of rising gold prices without resorting to hoarding it in a secret place. Let’s take a look at a few different methods of making money off of gold without ever having to find a place to store gold bars.

Gold Receipts

Receipts can be redeemed for gold, but you don’t need to if you don’t want to. Instead, you can purchase receipts, and then either store them (many can be done so digitally), or sell them at a later date for a profit. This can be done through government organizations in some countries, or through private groups. Electronic tradable receipts are the simplest way to do this, just make sure you go through a reputable company before you invest anything. Also, make sure that they have many clients in order to increase the liquidity of your receipts.

Trading them through Binary Options

These are pretty new, but they open up a new world of possibilities with gold, and commodities in general. The big problem of trading commodities in the past has been ownership and the responsibility that comes with it. Binary options take on none of this as no changes in ownership ever take place. Instead, you are speculating on price movement, and that’s it. You can trade short or long term, although trading gold short term is not easy. However, because of the fact that you can make large profits off of small amounts of movement, this isn’t a big problem anymore.

Futures Contracts

This is how gold futures are traded, but their liquidity isn’t always the best. Basically, you are agreeing to purchase (or sell) a set amount of gold on a set date in the future for a set price. If the price changes enough between now and then, you make a profit. Most people do not wait for their contract to expire, but instead sell their future once prices have changed enough to see a profit. This prevents the delivery of the commodity itself, but there is a chance that you will not be able to sell off your contract and be stuck with fulfilling the terms of the contract. Unless you are dealing with large dollar amounts, this is often not worth the risk.\
Stock with some Gold

There are a ton of stocks out there that are related to the price of gold. The big ones are usually mining stocks, but you can also trade ETFs based upon gold’s value, as well as the Australian dollar. The AUD is especially powerful as this economy is very dependent upon gold because of its large mining industry. Finding a currency that is moving strongly in the opposite direction of the AUD can help you to increase your chances of being successful here. Usually pairing it up with another major currency is best as this will eliminate many surprises in your Forex trading.

What’s Best?

It depends on what your goals are, really. If you are a smaller trader, then binary options present a huge advantage since you can sometimes trade them for as little as $10, and still see a profit. In other places, fees and other expenses are too high to trade realistically with this little. They are also better for short term trading, especially if you intend on keeping your trades open for less than a week. Other forms of trading can give you the same degree of success, but you will need to invest much more at one time to see the same results.