Micro Gold, short for micro gold futures traded on the CME, is the version of gold futures with the smallest contract size affordable to individual traders. In this article, we will compare the three versions of gold futures, detailing the contract specifics of micro gold. Key takeaways:
- Micro gold futures margin starts from $484, with a contract size of 10 ounces.
- Gold futures are bi-monthly contracts, expiring on the third-last date of the contract month.
- All gold futures operate 23 hours a day, allowing traders around the world to engage in trading conveniently.
Exchanges of Gold Futures
Let’s first clear up the confusion that many people have: COMEX gold futures, NYMEX gold futures, and CME gold futures. These names appear interchangeably in the media, but what are the differences between them?
In fact, they all refer to the same gold futures traded on the Commodity Exchange Inc. (COMEX), which merged with the New York Mercantile Exchange (NYMEX) in 1994, and was subsequently acquired by the Chicago Mercantile Exchange Group (CME) in 2008.
It is the world’s most important on-exchange gold futures, accounting for nearly 80% of the volume of gold futures and playing a key role in the world’s gold pricing. To maintain consistency, we will use CME gold futures in the remaining content of this article.
Micro Gold and Mini Gold
While there is only one gold futures to the public, for gold traders there are three types of gold futures with different contract sizes. The table below compares their contract sizes along with the contract value when gold is trading at $2,215 per ounce.
| Standard Gold Futures | Mini Gold Futures | Micro Gold Futures | |
|---|---|---|---|
| Contract Size | 100 ounces | 50 ounces | 10 ounces |
| Contract Value | $221,500 | $110,750 | $22,150 |
With a quick glance at the table, the contract value of micro gold is above $20,000, while mini gold is more than $110,000, making them both beyond the reach of the general public.
However, gold futures are traded on margin, meaning traders only need to put up a small margin rather than investing the full contract value. The margin required is much lower than the contract value.
Micro & Mini Gold Margin
The gold futures margin is determined by CME and futures brokers, based on market conditions. The margin will differ between daytrading and overnight trading. Any trade opened and closed between 09:00 and 16:00 falls under daytrading.
Additionally, the margin varies among brokers. Below are the typical gold futures margin requirements when gold futures is trading at $2100.
1). Micro Gold Futures Margin
Micro Gold Margin(Daytrading)
- Initial margin: $484 | Maintanance margin: $435
Micro gold futures margin starts at $484 for daytrading, while traders need to maintain an equity of $435 once the position is open. This level of margin is not a significant amount for many individuals. In fact, most individual traders participate in gold trading through micro gold futures, either for investment or speculation purposes.
Micro Gold Margin(Overnight)
- Initial margin: $968 | Maintanance margin: $880
The overnight micro gold futures margin begins at $968, which is double the margin in day trading. Although it is not a small amount, it is still acceptable for individual traders.
Looking for a lower margin? Gold CFD is another option, with a margin starting from $1. Check out the details in another article 「Trade Gold with $1 Margin: Exploring CFDs on Gold」.
2). Mini Gold Futures Margin
Similar to the contract size, the margin required for gold mini is five times that of micro gold:
- Mini gold margin (day trading): Initial margin: $2,420 | Maintenance margin: $2,000
- Mini gold margin (overnight): Initial margin: $4,840 | Maintenance margin: $4,000
The margin for mini gold futures starts from $2,420 for day trading and increases to $4,840 overnight. Both levels may not be as affordable to the general public anymore.
An interesting piece of information: Mini gold futures are the least traded among the three types of gold futures. Its daily trading volume is well below 1,000 contracts, whereas the daily volume of standard and micro gold futures are both at levels of more than 20,000 contracts.
Since the margin for gold mini is already on the edge of reach for individuals, we won’t expand on the margin details for standard gold futures, as its contract size doubles that of mini gold.
Gold Futures Contract Months
The price of gold futures indicates the market’s expectation of the gold price at a future date. Depending on the specific date in the future for the expectation, or the expiry date in other words, there are multiple futures contracts with different expiry dates available.
Gold futures are bi-monthly contracts, expiring every two months, with contract months of February, April, June, August, October, and December. The expiry date is the third-to-last trading date in the expiry month. For example, April 26th is the expiry date for the April 2024 contract.
The snapshot above, taken from the CME website, displays the quote and volume data for each contract month of micro gold. Unlike many other futures contracts, the lead contract for gold futures is not the front-month contract; instead, it is the contract month after.
Gold Futures Ticker & Tick Size
1). Gold Futures Ticker
The ticker of the three types of gold futures are different, traders might need to search by the ticker name to find them in futures broker’s trading platform.
Standard gold futures ticker: GC | Mini gold futures ticket: QO | Micro gold futures ticker: MGC
In many occasions, the ticker will be used to indicate the type of the gold futures. For example, GC futures for the standard futures, and MGC futures for the micro futures.
2). Gold Futures Tick Size
As shown in the micro gold quote below, gold futures are quoted to one decimal place. The tick size for all gold futures is 0.1, however, the tick value varies depending on the contract types:
- Standard gold futures tick value: $10
- Mini gold futures tick value: $5
- Micro gold futures tick value: $1
The gold price can be very volatile, sometimes the daily price fluctuaion can reach the level of $100. Even with the micro gold, $100 fluctuation in price will result in $1,000 profit and loss, doubles the micro gold margin.
Gold Futures Trading Hours
The gold futures market hours are the same for all three types of gold futures. During US daylight saving time, gold futures open at 06:00 on Monday, GMT+8, and close at 06:00 on Saturday, with a one-hour daily break from 05:00 to 06:00. US daylight saving time begins on the second Sunday in March and ends on the first Sunday of November.
Gold Futures Trading Hours(US daylight saving)
- Market open：Monday 06:00 | Market close：Saturday 05:00 | Daily break：05:00 ~ 06:00
Gold Futures Trading Hours(US winter time)
- Market open：Monday 07:00 | Market close：Saturday 06:00 | Daily break：06:00 ~ 07:00
Micro Gold VS Gold CFD
The margin requirement of micro gold, $484, may still be relatively expensive for some new traders. For those looking to speculate on gold prices with a lower margin, gold CFD might be a good option.
Gold CFD offers a minimum trading size of 0.01 lots (equivalent to 1 ounce), a maximum leverage ratio of hundreds, and only requires a small margin of $1 to start with. Check out the article below for more details:
