How do dealers manage their risk?

ytrader

ytrader

Member
not sure if I posted in the right section, free feel to move it :)

I'm curious how coin/bullion dealers manage their risk against price volatility. For example, if they hold certain number of gold/silver bullions in stock, by the time they sold the stock, the spot price could be lower than their cost.
Another example, if they take a purchase order over the weekend (priced @Friday's spot), let say a major event caused the spot price to plummet on Monday's exchange open, how do the dealers cover themselves for orders sold over the weekend?

Thanks in advance! :)
 
Thank you very much House for this video. I've learned something today!

Was sure dealers were never loosing money though but didn't know their business model.
 
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