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Silver Futures

A silver futures contract is a contract to buy or sell a specific weight of silver at a designated time in future, at an agreed price defined at the time the contract is entered. 

Silver futures contracts were originally designed to protect large industrial users of the precious metal from adverse price swings by enabling them to obtain or supply a steady quantity of silver at established prices in order that their respective businesses will be able to make a profit. 

Members of the public buying silver futures are usually speculators betting on the near term direction of the price of silver. They will buy silver futures when they believe that the price of the metal will rise and sell them when they think it will fall. Silver futures traders don't actually have to own or take delivery of the physical metal. They can just pay (or receive) the valuation difference in cash on delivery date by selecting the cash settlement option upon entering the trade. 

As futures trading account typically provide significant leverage, the associated profit potential as well as the risk involved can be very high. As an example, purchasing silver futures allow the investor to control $50000 worth of silver by merely paying only $5000 upfront.

Investors are advised to exercise due caution if they wish to venture into this highly speculative way of playing the silver market. The risk of trading silver futures is very high, especially for those who are uninitiated in the intriques of options and futures trading. Less aggressive silver investors are advised to stick to buying silver ETFs or the stocks of silver mining companies.

Silver Futures Trading

Silver futures are traded in futures exchanges worldwide. Below is a summary of silver futures contracts traded in major futures exchanges worldwide.

Standard Silver Futures Contracts

Exchange Symbol Contract Size Min. Price Fluctuation Initial Margin
New York Mercantile Exchange (NYMEX) SI 5000 troy ounces US$0.005 (0.5ยข) per troy ounce, equivalent to US$25.00 per contract approx 12%,
subject to change.
(see full contract specs.)
Tokyo Commodities Exchange (TOCOM) Not Available 30 kg (approximately 964.53 troy ounces) JPY 0.1 per 10 grams (300 japanese yen per contract) approx 12%,
subject to change.
(see full contract specs.)
Dubai Gold & Commodities Exchange (DGCX) DS 1000 troy ounces (approximately 31.1 kilograms) US$0.005 (0.5ct) per troy ounce, equivalent to US$5.00 per contract approx 10%,
subject to change.
(see full contract specs.)
Multi Commodity Exchange (MCX) SILVER 30 kg (approximately 964.53 troy ounces) Re. 1 per kilogram (Rs 30 per contract) approx 5%,
subject to change.
(see full contract specs.)

Silver Mini-Futures

In recent years, silver mini-futures contracts were introduced by some of the major futures exchanges to make silver futures trading accessible to more people. The contract sizes of silver mini-futures are lower than their standard counterparts and consequently, their margin requirements are lower, making them attractive to silver futures traders who would like to speculate with less money.

Exchange Symbol Contract Size Min. Price Fluctuation Initial Margin
New York Mercantile Exchange (NYMEX) QI 2500 troy oz. $0.0125 (1.25ct) per troy ounce ($31.25 per contract) approx 12%,
subject to change.
(see full contract specs.)
Multi Commodity Exchange (MCX) SILVERM 5 kg Re. 1 per kilogram (Rs 5 per contract) approx 5%,
subject to change.
(see full contract specs.)

How to Start Trading Silver Futures

To buy or sell silver futures, you need to open a trading account with a broker that handles silver futures trades. Most online brokerages out there only deal with stocks and stock options. Only a few such as TD Ameritrade lets you trade futures and futures options as well. TD Ameritrade also provide a virtual trading platform where beginners can try out futures and options trading in real market conditions without using real money.