Why Trade Bullion?

Gold Trading in China

Information regarding gold trading within China is very difficult to verify as there are many sources which claim to have regulatory authority to act as a legitimate Loco London bullion e-trader. As there is no formal regulatory authoritative body in China to trade gold, it is difficult to judge the authenticity and legitimacy of these mainland companies.

There is only one legitimate method for gold investment in China, which is through The Shanghai Gold Exchange.

Below is a comparison between the method to trade in the Shanghai Gold Exchange and the Hong Kong bullion market represented by the Chinese Gold and Silver Exchange Society.
Trading threshold: Minimum Margin Required

Shanghai Gold Exchange

At the Shanghai Gold Exchange, the minimum requirement for each contract is 1 lot, equivalent to 1000g of gold. The margin requirement is 17% of the contract value. Assuming that the gold price is 350 RMB/g, the minimum amount of margin for each transaction order is:

350 RMB/g x 1000 g x 17% = 59500 RMB


 Acetop Precious Metals Limited

In Acetop Precious Metals Limited, the minimum requirement for each contract is 0.05 lot, when each lot corresponds to 100 oz. of gold (1 oz. is equivalent to about 31 grams, i.e., each lot is about 3100 g of gold). There is a fixed margin of US$ 1,000 for each contract of 1 lot. Therefore, the minimum amount of margin requirement for each trade position is:

US$ 1,000 x0.05 = US$ 50
US$ 50 x6.4 = 320 RMB(6.4 is the exchange rate of RMB against U.S. dollar)
A margin of US$ 1,000 x6.4 = 6400 RMB is needed for a transaction of 1 lot of gold (3100 g)

 Acetop Precious Metals Limited has a lower transaction threshold that allows investors to participate with lower margin requirements to participate in a traditionally high cost investment.

Acetop Precious Metals Limited adopts international price quotations under Loco London Gold and Loco London Silver, which means that the quotation currency is in U.S. dollar. This international contract has a standardized contract unit of weight, denoted in ounces (oz). Assuming the price of gold is 350 RMB/g,which is equivalent to:

350x31/6.4=US$ 1695 / oz.(1 oz. of gold equals to approximately 31g,1:6.4 is the approximate exchange rate of USD:RMB)


Trading Hours

Shanghai Gold Exchange Trading Hours

The trading hours of Shanghai Gold Exchange are divided into 3 sections:
09:00-11:30 13:30-15:30 21:00-02:30
There are a total of 10 trading hours separated into three different trading times, once in the morning, at noon and in the evening every day.


Acetop Precious Metals Limited Trading Hours:

The usual trading hours are from 8:00 am Monday to 3:30 am。Saturday (HKT). With no effective clearing time required; trading can be effective through the 24 hours per trading day from Monday to Saturday.

The gold price is most active in the afternoon to the evening (14:00 – 23:00 HKT) when the European markets open while overlapping the time when the U.S. market open. By 00:00 HKT, trading activities will usually slowdown when the London market closes. As trading hours of the Shanghai Gold Exchange are not continuous throughout the trading day, investors may find themselves unable to trade during peak hours at the evening time. Whenever an investor is faced with a restricted time limit for an international product type, investors may not be able to open or close position which may result in missed opportunities
In contrast, Acetop Precious Metals Limited provides investors an uninterrupted 24-hour market, clients can thus operate their trading accounts any time, in response to the latest market movements. 

Margin levels and Leverage Ratio

Both of the Shanghai Gold Exchange and Acetop Precious Metals Limited adopt long and short positions (buy and sell positions) as a form of margin trading,

The margin requirement of the Shanghai Gold Exchange is approximately 17% of the contract value. Investors only need to invest 17% of the value of the gold to open the trade order such that: 1 lot of gold (1000 grams) costs 350 x 1000 = 35 million, while only investing 350,000 x 17% = 59,500 RMB
The ratio between the actual value and the margin is called leverage ratio,
Shanghai Gold Exchange Leverage Ratio:
350,000 / 59,500 RMB = 5.88
Acetop Precious Metal Limited Leverage Ratio:
US$ 1,695 / oz. x 100 oz. / US$ 1,000 = 165((assuming that the current price of gold is US$ 1,695 / oz.)) 

A Primer on calculating profit & loss with Acetop Precious Metals

Using Acetop Precious Metals Limited as an example:
Assume that 1 lot of gold is purchased on the trading platform (i.e., 100 oz. of gold), the invested margin is US$ 1,000, the purchase price is US$ 1,600/oz., if the close position is sold for US$ 1610 on that day, the profit gained from the transaction will be:(1610 - 1600) x 100 - 0 - 0 = $US 1000