Lex explains the concepts of margin, leverage and volatility; all of which are encountered when trading gold. He then shares his views on why gold has proved to be such a great source of diversification, before moving our focus to the risk attached to so-called ‘ETNs’ and the breakdown of total volume traded in gold.
Once you have an understanding of the magnitude of the trading market for gold versus the underlying physical demand for gold, and the volumes that go through it for different reasons, Lex will explain the risks attached to the more complex financing transactions. He later concludes the module by reviewing the risks attached to the futures market, and even to owning gold in physical form.
