Gold Futures - Can anybody explain this please?

Big_P

Active member
100 19
Hi all,

Historically, I've mainly traded equity futures but I've recently decided to look at a few other markets.
I spotted something a bit odd with Gold Futures (GC) and wondered if anybody can explain.

So the contracts expire monthly - F, G, H, J, K, M, N, Q, U, V, Z

I had a look at the volumes for 2020 and every other month, volume completely drops away.
To demonstrate, here is each month for 2020, showing the highest volume on any one day for that contract:

Januray (F) - 4,335
February (G) - 814,406
March (H)- 4,079
April (J) - 745,843
May (K) - 3,075
June (M) - 313,174
July (N) - 3,438
August (Q) - 434,445
September (U) - 6,160
October (V) - 31,825
November (X) - 1,900
December (Z) - 565,001

It seems that G, J, M, Q, V and Z are heavily traded
And F, H, K, N, U and X are barely touched (relatively, to their previous month)

I'm curious. Is there a reason for this (maybe historically or otherwise?)
Is there something I'm missing?

Cheers,

Big_P
 

BigDeal

Active member
105 51
Seems strange on the face of it.
I wonder if it ties in with other futures expiries, whereby gold is used as a hedge? Can't be against indices as these are quarterly, but maybe something else which expires every other month?
 
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Big_P

Active member
100 19
Seems strange on the face of it.
I wonder if it ties in with other futures expiries, whereby gold is used as a hedge? Can't be against indices as these are quarterly, but maybe something else which expires every other month?

That's a good thought BigDeal ... does this tie in with the expiry on another market?

I'm still really curious as to why this happens!
 

kevinkdog

Junior member
28 14
This goes back to the Pit days, where only certain contracts were traded, and others basically ignored. I'd almost wonder if it was the result of certain big players or locals avoiding certain months.

You might think "OK, but pits have been long gone, why does this continue?" Data providers might be to blame. When Tradestation, for example, creates continuous contracts, they do not use those low volume months, even today. So people who trade off of continuous will only trade G J M Q V Z. That helps keep this anomaly going even today.
 
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ARBinstruktor

Junior member
33 4
That is simply a market characteristic grown in time. Almost any commodity has its own characteristic contract cycle. This also holds for expiration and delivery dates.
Financial futures are much younger and therfore much more standardized, especially because only a few exchanges have survived.
A higher diversity might be a plus anyway, as witching hours become more and more violent ( I am not saying that any witch is violent, but that mere existence of witches bears the potential for volatility).
Higher diversity of course implies higher concentration and scrutiny.
 
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