IBKR (UK) OTC derivatives referencing the price movements of physical Gold (XAUUSD) and Silver (XAGUSD) are available to qualifying customers.1
IBKR (UK) Unallocated Gold/Silver are not listed instruments but traded over the counter between qualifying clients and IBKR (UK). Unallocated means that IBKR has a general claim on physical gold held by a bullion dealer, forming the basis for the client contract. Unallocated represents the most popular and straightforward way of trading gold and silver.
IBKR (UK) Unallocated Gold/Silver enable clients to have exposure to price movements of physical gold or silver without owning them outright. Thus, if the price of physical gold or silver traded on the London bullion market rises, clients receive cash from IBKR (UK) and vice versa. London Unallocated Gold/Silver can be bought long or sold short to suit clients’ view of market direction in the future.
IBKR (UK) Unallocated Gold/Silver are marginable products enabling clients to obtain exposure in excess of the cash available in the account. The level of leverage depends on the margin requirement as determined by IBKR (UK) from time to time.
Additional benefits include:
Commissions start at just 1.5 basis points for Gold and 3 basis points for Silver, and overnight financing rates for leveraged positions start at the benchmark rate + 1.5%, with lower rates available for larger balances.
Short positions incur a borrow fee starting at benchmark + 1%, with lower rates available for larger balances. There is also an Unallocated Carrying Fee of 10 basis points charged for storage. Settlement is T+2.
The London bullion market is a wholesale market. However, IBKR clients have access to its efficient pricing, as quoted by IBKR's liquidity providers, without having to trade in wholesale quantities.
IBKR Unallocated Gold/Silver are quoted units of 1 troy ounce and quoted against USD. IBKR passes through prices from its liquidity providers without widening the spread.
A Troy Ounce is the traditional unit of weight used for precious metals. The term derives from the French town of Troyes, where this unit was first used in the Middle Ages. One troy ounce is equal to 1.0971428 ounces avoirdupois. In the bullion market, all references to ounces mean troy ounces.
The Loco London Spot Price is the basis for virtually all transactions in gold and silver in London. It is a quotation made by dealers based on US dollars per fine ounce for gold and silver. IBKR's liquidity providers provide quotes based on this price. Settlement is (T+2).
Loco London Gold and Silver are considered "unallocated", which represents the most popular and straightforward way of trading gold and silver. Credit balances are backed by the general stock of the bullion dealer who has the gold or silver, and debit balances represent the indebtedness of the trader to the bullion dealer. In other words, a position in gold or silver is not an entitlement to specific bars of gold or silver.
Eligible customers must apply for Metals trading permissions via the Trading Permissions page in Client Portal.