Important note: Please inform yourself extensively about functioning and risks before you acquire any financial derivatives, and review your investment decision carefully as to whether or not a selected financial derivative is in accordance with your personal risk tendency, and is therefore suitable for your investment targets. Please note that trading in financial derivatives on usual market conditions is subject to rate changes and risk of loss, and therefore can result in a total loss of your investment. Past development of values is not a reliable indicator for future developments. Please also take into account costs associated with acquisition and disposal of financial derivatives (e.g. order fees, trading place fees etc.). The above presentation is merely meant as general information, but must not be considered as personal recommendation. Financial derivatives are merely arranged and placed by us (no advice). Any information presented in this website are solely addressed to individuals, and cannot be considered as counselling or advice for investment, or offer for purchase or sale of financial derivatives or other financial instruments. They solely serve information purposes. By using this website, you do not close a consultation or information agreement with us as online brokers and financial portal. Any information, data and presentations included in this website are protected as regards trademarks and/or copyrights in favour of German Investors 500 GmbH or its suppliers. For securities-related information, German Investors 500 GmbH cooperates with other suppliers. Risk note: CFDs, Forex, futures, options, binary options and spread betting are financial products with leverage effect. Trading in these products incorporates a high risk which cannot be suitable and appropriate for any investor. Please ensure that you fully understand all risks associated with these products, and obtain professional advice, if necessary. Trading in these financial products may not only result in a total loss of your capital used, but may lead to further loss in excess of it. This means of advertising does not constitute individual investment counselling. Rates and standing data: All informationen on rates as well as data service are provided by German Investors 500 GmbH Source: German Investors 500 GmbH Data Service Source for standing data of derivatives: German Investors 500 GmbH We do not accept liability as regards correctness of data. Commercial use of data is prohibited. We do not accept liability for the correctness of presented rate data, standing data and market data. Legal note: standard terms and conditions, data protection notes, imprint, contact details Securing of capital contributions: All customer accounts and depots traded via our platform TWS4 are kept and maintained by Interactive Brokers LLC, located in the U.S.A. All securities accounts of our customers are protected up to an amount of 30 million US$ (including up to 1 million US$ for cash deposits). The market value of shares, options, warrant issues, bond issues and cash deposits in any currency is protected by this insurance. Securities customer accounts are protected at Interactive Brokers LLC through 'SIPC' (Securities Investor Protection Corporation) with a maximum cover of US$ 500,000 (including US$ 250,000 for cash deposits). Under the Interactive Brokers LLC's Excess SIPC Policy customers are additionally insured by the insurance company Lloyd's of London with an additional amount of US$ 30 million (including US$ 900,000 for cash deposits). This maximum amount is part of an overall insurance cover of US$ 150 million. Futures and options relating to futures are not covered. Like is the case with any securities companies, this insurance does only refer to failure of the broker dealer. Losses due to trade or decrease in value relating to securities are not covered. For the purpose of determining of a customer account, accounts in the same name and of the same type (e.g. individual account Anton and Mia Schulz, and individual account Anton und Mia Schulz) are combined. Accounts of different types (e.g. individual account Mike Muster and IRA account Mike Muster) will not be combined. Securing of capital contributions of private customers: All customers are automatically categorized as retail customers/private customers, and the customer is notified of it in the first confirmation of opening of accounts sent to him. For regulated financial service providers exist strict rules for protection of capital contribution of private customers. Customer’s funds of private customers are secured as follows: Separately kept capital contributions: In accordance with the rules applicable to customer’s funds it reads: „A company has to warrant that any deposited customer’s funds are kept in a central bank separately from other accounts“. Your capital will be deposited in separate bank accounts, maintained by Barclays Bank. This process is regularly monitored by chartered accountants/auditors. Liability roof note: German Investors 500 GmbH (BaFin Nr. 80155676) works in the field of investment placement as a bound agent in the meaning of § 2 (10) sentence 1 of the KWG [= German Act on Banking and Credit Business] solely on behalf of and subject to liability of NFS Netfonds Financial Service GmbH Süderstraße 30, 20097 Hamburg, Deutschland. NFS is a free and independent financial service provider and possesses any licences and permits required by the German Federal Office for Financial Service Providers (BaFin). © 2017 German Investors 500 GmbH
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Futures   as   securing   for   companies   make   sense   for   enterprises   which   trade   internationally   and   with   several   currencies.   Here   you   can   secure   your   own   currency,   e.g.   the   Euro against   another   currency   with   reasonable   effort   and   at   relatively   low   costs.   This   way   of   securing   is   a   bit   like   deep-freezing   a   certain   currency   exchange   rate.   Our   Support   Team is happy to provide general information (no investment tips or recommendations). Another   opportunity,   however   restricted   to   only   a   few   raw   materials,   is   securing   of   physical   raw   material.   Let’s   assume   a   company   buys   raw   material   in   order   to   process   it   and sell   it   to   its   customers   afterwards.   This   involves   a   chance   you   might   suffer   loss   due   to   market   developments   to   the   disadvantage   of   this   physical   raw   material   position.   In   order for   the   company   to   actively   oppose   this   loss,   they   can   acquire   this   raw   material   as   short   sale   in   the   same   extent   as   a   physical   position,   and   consequently   the   likelihood   of   loss is cancelled out. Here we have equalization between profit and loss. The company merely incurs costs for the transaction of futures. Pros & Cons of futures securing: One advantage is that a company receives a fixed price and accordingly a product becomes more calculable. It is disadvantageous that you do not have any additional profit opportunities which might arise due to a general increase in prices relating to physical raw material. In   a   perfect   securing   scenario,   the   profit   generated   by   securing   exactly   equalizes   the   loss   of   the   basic   position.   Most   securing   scenarios,   however,   are   not   perfect   since   the selected   derivatives   and   positions   at   trading   places   show   slight   differences   in   rate   movements,   or   the   number   of   derivatives   bought   is   not   identical   to   the   number   of   open positions. Here is a practical example: Let’s   assume   a   gold   trader   receives   a   delivery   of   5kg   gold   of   a   total   value   of   170,000   Euros,   and   he   wishes   to   maintain   both   the   current   value   and   limit   a   possible   loss   to   a minimum in case of dropping  rates. In such case, he has the opportunity to open a gold future short position of a value of 170,000 Euros. Consequently, the value of 5 kg of gold is technically deep-frozen except for order fees.
Hedging with futures
Example in numbers
 physical gold
 gold-futures (short)
 Price (EUR)
 170.000
 170.000 (equivalent)
 Profit or loss on exchange rates if the underlying rises or falls. 
 + 1 %
 171.700
 -   1.700
 + 5 %
 178.500
 -   8.500
 +10 %
 187.000
 - 17.000
 - 1 %
 168.300
 +  1.700
 - 5 %
 161.500
 +  8.500
 - 10 %
 153.000
 + 17.000
Note: In this example, fees for acquisition of a gold future position have not been taken into account. Costs are usually relatively low compared with securing costs.
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