Path B · Futures GC/MGC · Module B3
B2 ended on a promise with a price attached: futures don't remove difficulty, they relocate it — no spread, but a commission; no swap, but a roll. This module makes good on that sentence. We count every cost a futures position carries, show where each one replaces something from spot, and put the whole bill next to Path A's so you can compare like for like.
What this module does
The first inversion
In spot gold, the headline cost of a trade is the spread — the gap between bid and ask that your broker sets and earns. It's a real cost, but a slippery one: baked into the price, varying with the broker's markup, never itemised. A raw-style account might show as little as ~0.08 on gold; a marked-up standard account, north of 0.30. You pay it on the way in and the way out, and you rarely see it as a number.
Futures invert this the same way B2 inverted everything else: the cost moves out of the price and onto a schedule. Because no broker prices against you — the price comes from the central order book — your FCM can't earn a spread. The market's bid-ask on a liquid front-month contract is genuinely just the market's, often a single tick wide. What the FCM earns instead is a commission: a flat, disclosed, per-contract, per-side fee. And the exchange takes its own small exchange and clearing fee per contract. Both are published. Neither is hidden in the price.
This is the spread→commission swap, and the important word is legible. In spot, your transaction cost was a markup you had to infer. In futures, it's a line item you can look up before you trade and add up after. You are not necessarily paying less — that depends on the contract, your FCM, and how often you trade. You are paying visibly, which is the same upgrade in honesty B2 found everywhere else in the structure.
Turning price into dollars
To weigh any cost you first need to know what a price move is worth, and futures make this exact, because the contract size is fixed by the exchange rather than chosen by you. B1 gave you the two numbers. Here's the arithmetic they unlock.
The minimum price increment — the tick — is $0.10 per troy ounce on both contracts. The dollar value of that tick is just the tick times the contract size:
Your contract
MGC
Micro · 10 oz
Every full dollar gold moves is worth $10 to one MGC. That's your unit of P&L.
GC
Standard · 100 oz
Exactly 10× MGC, line for line. Same market, ten times the dollar weight per tick.
Now a cost has a denominator. Suppose your all-in transaction cost on one MGC — commission plus exchange fee, both sides of a round turn — comes to a few dollars. Against a tick worth $1 and a typical daily range worth tens of dollars, you can see exactly what fraction of your move the cost eats. You couldn't do that cleanly in spot, because the spread was inside the price you were measuring from. Here the cost and the move are separate, countable quantities. That separability is the legibility from Job 1, made arithmetic.
Notice we are giving you the relationships — tick to dollar, MGC to GC, cost to range — and not asking you to memorise a commission rate. Rates vary by FCM and change over time. The structure does not: one MGC tick is always $1, GC is always 10× MGC, and a published fee is always something you can divide into a known move. Learn the relationship; look up the level when you trade.
The second inversion
In spot, the cost of holding a position is swap: the overnight financing adjustment, which is worth defining correctly — an interest-rate differential carrying a sign, not a flat fee, debited or credited each night you hold, and tripled on Wednesday to account for the weekend. It's distinct from the spread cost of transacting.
Futures have no swap. There is no nightly financing line, no triple-swap Wednesday, because a futures contract isn't a financed position you borrow to hold — it's an outright obligation with an expiry date built in. But do not read "no swap" as "free to hold," because the cost of carrying gold doesn't vanish in futures. It moves somewhere you can see it: into the price of the contract itself, and you meet it at the roll.
Here's the mechanism, and it's the whole reason B4 exists. Gold futures are almost always in contango — each further-out contract month costs slightly more than the nearer one, because the price has the cost of storing and financing the metal until that later date baked in. That premium is the futures market's version of the carrying cost spot charged you as swap. When your contract nears expiry and you roll — closing the front month and opening the next — a long position sells the cheaper expiring contract and buys the dearer later one. That difference is a real cost, called negative roll yield. It is the carrying cost of gold, collected from you in a different place than spot collected it.
So the two instruments charge you to hold the same metal; they just present the bill differently. Spot itemises carry nightly as swap. Futures fold it into the contract curve and you settle up at the roll. Neither is free. The futures version is, characteristically, more visible — it's a price difference you can read off two quotes — but it is not an absence of cost, and anyone who sells futures as "swap-free" while staying quiet about contango is doing the spot-broker thing of hiding carry inside a price. B4 takes the roll apart in full. For now, hold the principle: no swap is not no carry.
The bill, totalled
Put the whole thing next to spot. Every cost in spot has a counterpart in futures; the difference is almost never that one is free, but that futures move the cost out of the price and onto a number you can read.
Spot
Futures
Read the rows across, not down. Spread answers to commission-plus-fee; swap answers to the roll. The structural upgrade is the bottom two rows: in spot, both who-sets-it and can-you-see-it pointed back at a broker's discretion; in futures, both point at public, lookupable quantities. That is the same inversion B2 found in the counterparty, now visible in the cost ledger.
And here is the honest catch, the one that keeps this from being a sales pitch. Cheaper to transact is not the same as cheaper to hold, and futures is not automatically cheaper at all. A scalper doing many round turns may find futures commissions add up faster than a tight raw spread. A position trader holding for weeks may find the contango roll costs more or less than spot swap depending on rates and the curve. The point of this module is not "futures are cheaper." It's that futures costs are countable — and a cost you can count is a cost you can decide about. Whether the total comes out lower is a question only your own trading frequency and holding period can answer.
Carrying forward
We've now named the roll cost twice and deferred it twice — because it's big enough to own a module. A futures contract is not a position you can hold forever; it has an expiry date, and the carrying cost we just met is collected as you move from one contract to the next. The next module follows a position all the way to that expiry and through the roll: why contracts end, when to be gone, and how the calendar that governs all of it actually works.