FAQ

Below are answers to questions we often hear about purchasing physical commodities and how our Matrix Account could be an appropriate fit with your specific investment goals.

How would you define “physical commodity investing?”
Our Matrix Account allows you to purchase the actual physical commodity, as opposed to buying a futures or options contract on an underlying commodity. By that we mean the investor buys the physical metal itself, in the form of either bullion bars or coins. If you choose to make a fully-paid purchase you have the following options available to you:
·          The commodity delivered to your place of residence
·          The commodity stored in a depository selected by Madison Precious Metals
·          The commodity delivered to a depository of your choice

I understand that when I open a Matrix Account I can elect to have Madison Precious Metals, Inc. finance a portion of the total purchase price, how does that work?
Once your new account is approved, we will accept an equity deposit from you, usually 20 to 25% of the purchase price, and will then finance the balance. Participation in our Matrix Account enables you to purchase four to five times more of a commodity than you otherwise could in a fully-paid purchase and gives you the benefit of powerful leverage, so your investment dollars work harder for you. Financing a portion of your purchase through Madison Precious Metals, Inc. entails certain interest costs and service fees; you also have the option of arranging your own financing.

How does the Matrix Account compare to trading commodity futures contracts?
With our Matrix Account you invest in the actual commodity, not a piece of paper and there are no delivery dates or contract rollovers to worry about. Purchasing commodities through our Matrix Account is similar to purchasing a futures contract in that you can create powerful investment leverage; but unlike the futures contracts that have the risk potential to develop negative equity in your account, our non-recourse loan feature limits your risk to your equity deposit.

How does the non-recourse loan work?
When you agree to have a portion of the purchase price financed, the company does so through the establishment of a non-recourse loan, which simply means that we take the responsibility for any deficit that may occur in your account due to unfavorable market movement. If the markets in which you are invested move against you and the equity in your account falls below minimum levels, you have the choice of adding more equity to your account or closing the transaction at a loss. Should you elect to increase the equity in your account by depositing additional funds, the total amount of the funds committed to maintaining required margin levels in your account will be at risk. However, if you decide to liquidate your account, you cannot lose more than you have already deposited.

Your limited-risk feature sounds like your Matrix Account is similar to trading options on futures. Is that the case?
Our Matrix Account is similar to purchasing options on futures contracts in that you do have pre-determined, limited risk; but unlike options, our the Matrix Account has no expiration date! You won't be forced out of a trade because time ran out on you; since our Matrix Account involves the purchase or sale of physical commodities, rather than an option on a “dated” futures contract, you have staying power to ride out adverse or sideways market movement.

I understand that the Matrix Account offers an innovative way to purchase commodities, but does it also offer a way for investors to sell commodities as an opening transaction?
Yes, you can invest in rising or falling physical commodity markets and have the ability to realize significant investment profits no matter which way the markets are moving. Through the use of the “Commodity Loan” feature, most of the commodities available from Madison Precious Metals, Inc. for purchase can also be “sold” as new, opening transactions. Check with your Account Representative for full details. Volatility often means opportunity and with our Matrix Account you can take advantage of the effects of rapidly changing commodity prices whether they are moving up or down. A reminder: The purchase or sale of physical commodities is speculative and should be engaged in only by investors who can comfortably lose part or all of their investment.

I often use “stop” and “limit” orders in my trading, does your Matrix Account permit these types of orders?
Yes, you can control your entry and exit points by using limit and stop-loss orders. You can place a limit order to execute a trade at a price higher or lower than the current price, enabling you to enter the market at the price you feel is appropriate. To help prevent losses from spinning out of control, you can place a stop order to close out your transaction in the event prices rise above or fall below a level you decide in advance. It is important to understand that when a stop order is triggered, it then becomes a “market order” and your transaction will be closed at a price that could be considerably higher or lower than the price on your stop order. 

Is Madison Precious Metals, Inc. affiliated with any other entities.
YES - Madison Trading, Inc.