Profit from Market Ups and Downs

AAG Markets enables you to take advantage of markets that are going up, as well as those that are going down.

Long vs. Short

If you want to buy Gold because you believe Gold is about to go up, your position will grow in value as the Gold price goes up. However, if Gold price drops, your position will lose value. AAG Markets allows you to open positions that will increase in value even if the asset you bought is going down in price. This is called “going short”, as opposed to buying, or “going long”.

Going Long / Buy

If Gold market price is at $1,900 and you think that there is room to go up so you buy 100 troy ounces at $1,900. Your total position value is at $190,000.

Because AAG Markets offers leveraged trading, you will only be putting up a minimum of 0.5% of the position size, which is $950.

If your analysis is correct and the Gold price goes up, you may decide to take your profits. Let’s say Gold rises to $2,200 when you decide to close your position.

To calculate your profit, you need to multiply the difference between the closing price and the opening price of your position by its size.

2200 – 1900 = 300, which is a 15.78% return. Since you were leveraged 1:200 in order to buy 100 ounces of Gold, multiply 15.78% by 200, then by your initial investment of $950. Your profit is $30,000.

Going Short / Sell

If Gold price is at $1,900 and you expect the upcoming negative news about Gold to impact its price, you decide to sell Gold. Going “short” allows you to sell something you don’t own yet, and buy it back later at a lower price, therefore allowing you to earn profit from the difference.

One contract of Gold is 100 troy ounces, and has a margin requirement of 0.5% (1:200 leverage), so you need to deposit $1,900x100x0.5%=$950 as margin collateral.

The announcement is a disappointing one, and Gold plummets to $1,600. You’re ready to secure your profit, so you close your short position.

1900 – 1600 = 300, which is a 15.78% difference. Since you were leveraged 1:200 in order to sell 100 troy ounces of Gold, multiply 15.78% by 200, then by your initial investment of $950. Your profit is $30,000.

Profit from market growth

Profit From Market Growth

Profit from market decline

Profit From Market Decline

Calculating Profits

To calculate the profit earned from a long/short trade, you multiply the size of your position by the difference in points between the price when you opened it, which is when you entered into the trade, and when you closed it, which is when you exited. With both long and short trades, profits will be be realized (added to your balance) once the position is closed.

You can also use leverage| to get exposure to a much larger position than with a standard trade (for both long and short), if you are confident about the direction of the market.

Open a Free Account Now

It’s free to open an account, and there is no obligation to fund or trade.​