According to those who forget, among the banks in Ningbo that launched the Gold T+D business, the margin threshold for ABC (Agricultural Bank of China) is relatively lower at 20%, while the lowest belongs to Standard Chartered Bank at 10.5%, and Industrial Bank stands at 12%.
The risk is relatively large and not suitable for beginners.
Gold T+D business is a deferred delivery speculative type initiated by the Shanghai Gold Exchange, where leveraged trading occurs through a margin system. It has a long-short position dual mechanism, and its shorting mechanism allows gold traders to make profits even during a downturn.
"T+D trading involves more risks compared to stocks, and it is not suitable for beginners," an official from the Ningbo Retail Banking Department of Shenzhen Development Bank told us. "We suggest that entry-level investors first try physical gold trading or Silver T+D."
According to my understanding, the trading time segments for the Gold T+D business are basically the same as those for individual physical gold trading. This includes Monday to Friday from 9:00 AM to 11:30 AM and 1:30 PM to 3:30 PM, as well as Monday to Thursday evenings from 9:00 PM to 2:30 AM. In terms of trading costs, banks in Ningbo generally set the two-way spread at around 0.002% of the transaction amount, with levels ranging from 0.0012% to 0.0018%. This is lower than the fees for individual physical gold transactions.
Introducing margins can amplify returns up to five times.
If the direction is judged correctly, profits can be made whether the gold price rises or falls.
"The attractive aspect of T+D is that if the direction is accurately predicted, profits can be made whether the gold price rises or falls. With physical gold trading or paper gold, one can only wait for the price to rise to make a profit," Chong Yan, a wealth manager at the Ningbo branch of Industrial Bank, told me.
An official from the ICBC city branch stated that setting the margin at 20% is to reduce customer risks. "If the margin were set at 10%, 10 yuan could conduct a 100-yuan trade, but the risk would also increase accordingly. We feel that amplifying five times relatively reduces the risk somewhat." An official from the ABC city branch explained this to the reporter.
"A person bought two lots of long positions at around 252 yuan/gram in early April, and when the gold price reached 267 yuan/gram in mid-May, they closed their positions." Investor Mr. Sun began dabbling in paper gold investments in late 2007, and started doing T+D trading this year. Speaking about his recent trading experience, he repeatedly said, "It's indeed more stimulating than paper gold."
I found during the interviews that many banks currently offering Gold T+D business have also launched Silver T+D. "Using Silver T+D to practice and familiarize oneself with the operation of such investment tools is very necessary." Chong Yan informed me that the operation methods of Silver T+D and Gold T+D are similar. Due to the cheaper silver prices, the entry threshold is lower. "Our bank's margin rate is 12%, so for one lot, 500 yuan is sufficient."
Gold has performed exceptionally well since the beginning of the year, and related investment tools are gradually becoming familiar to investors. The Gold T+D, which can amplify trades, has become the pride of some high-risk investors. In mid-May, when the spot gold price surged to $1249.30 per ounce, the daily average trading volume of some banks' Gold T+D business in Yongcheng increased several times compared to last month.
"According to the regulations of the Gold Exchange, the T+D margin is generally 10% of the contract value. Banks, to control risks, usually set a slightly higher margin level. Our bank stipulates that the margin is 15%, meaning that with 15% of the capital, one can conduct 100% of the trade, amplifying nearly seven times," relevant personnel from the Jiangxi Branch of Shenzhen Development Bank in Ningbo told reporters.