Calculating Profit/Loss (P/L) & Use of Leverage (TOCOM Gold Contract)
TOCOM Gold Contract Details
- Price quoted for Gold on the TOCOM Exchange is priced Per gram.
- The contract is 1 KG and its current full value (Aug. 2009) is approximately 3 million yen.
- The initial margin is 120,000 yen so leverage is more than 25 to1.
- Each 1 tick change in price (1 yen) is a change of 1,000 yen of either unrealized profit or loss depending on your position.
- (Data as of Aug.2009)
How to Calculate Profit/Loss (P/L) on TOCOM Gold Contract
If you buy 1 contract of TOCOM gold and the price decreases ¥1 after purchase, you would have an unrealized loss of ¥1,000. If the price increases ¥1 after purchase, you would have a ¥1,000 yen unrealized profit.
The average daily change in the price of TOCOM gold for 1 year (April 9th 2008 - April 8th 2009) was ¥44. So, if you held the position for 1 day, your average profit (or loss) would have been ¥44,000 (¥44 X 1,000 = ¥44,000).
The average weekly change in the price of TOCOM gold for 1 week during the same period was ¥101, resulting in a profit (or loss) of ¥101,000 (¥101 X 1,000 = ¥101,000).
*Actual changes in prices will either be higher or lower as market conditions rapidly fluctuate and these examples are based on only 1 year of data and are just given as examples.
*Commission Fees (¥472 one-way) are subtracted when the position is closed (Total of ¥944 for round-trip).
*The P/L of the TOCOM Gold contract changes by ¥1,000 per tick (¥1 change in price) but all contracts TOCOM are not the same. As an example, the TOCOM Platinum contract changes by ¥500 per tick, etc.
- (Data as of Aug.2009)
Gold Mini Contract
On TOCOM there is also a Gold Mini contract. It is 1/10 the size (100 grams) of the regular gold contract. The initial margin is ¥16,000 and the value of the contract is approximately ¥300,000 at current prices (Aug. 2009) so the leverage is around 20 to 1. Each tick (price change) results in a change in the P/L of ¥100. The Mini contract is also popular with traders first starting out as the leverage is less, the commission is lower and the initial required margin is much less.
- (Data as of Aug.2009)
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