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July 13, 2007
Silver Futures
Throughout history, silver hat been a desired asset. Today’s commodity trading of silver futures is proof of man’s continued interest in this precious metal. During the centuries, silver has captured the eye of civilizations and pirates. It has been used for jewelry, religious symbols and other adornments because of its beauty and ease of forming.

Even today, the value of silver is quite high. No longer found on the Earth’s surface, mines tunnel deeper into the soil searching for this precious metal. In addition to its beauty, silver is utilized in photographic and electronic applications as well. All of this demand makes silver excellent for commodity investing and silver futures trading reflects the investment options provided by this precious metal.

Why Invest In Silver Futures?
Futures trading is an exciting way to profit from investing in silver. Silver futures allow investors the right to buy and sell this metal; this is actually the very definition of trading futures. Futures is the investment strategy where you can purchase the right to buy or sell a commodity at a later date; in addition, you are able to leverage your investments, allowing you to control large sums of a particular commodity for a small price. Silver futures allow you to do this with one of the most desired assets in the world.

Where Are Silver Futures Traded?
There are a number of futures markets throughout the world for trading silver futures. One of the most important locations for trading is the COMEX in New York City. This market was formed by a merger between New York Mercantile Exchange and the Commodity Exchange in 1994 and is now the world’s largest commodity futures exchange. By trading silver futures at an exchange, you received several distinct advantages:
  • Standardized contracts – This ensures that the agreement is consistent with accepted business practices.


  • Exchanges are able to offer commodities trading that is affordable and has well-established risk management opportunities.


  • Prices are instantly available to traders


  • Since trades are made through commodity brokers, trades are made anonymously.


  • Although futures contracts are rarely ever filled and delivered, futures exchanges offer solutions for safe delivery.


  • Exchanges offer safe, fair, and orderly markets that are protected by its strict financial standards and surveillance procedures.


  • Exchanges offer futures options and hedging insurance for additional investment opportunities.
Typical Contract Details For Silver Futures
  • Basic Trading Unit – 5,000 troy ounces


  • Units Of Price – Dollars and cents per troy ounce


  • Tick (Basic Unit Of Change) - $0.005 per troy ounce or $25 per contract


  • Trading Periods – Options contracts are traded beginning with the current month and typically the following two months.


  • Options Trading – Options trading includes market orders such as stop limits, buy straddles and buy strangles, among others.
Should You Invest In Silver Futures?
Where you choose to establish your investment strategy is a very personal choice. It is important to consider your trading plan, your investment objectives and your financial situation before beginning to trade in any market. While you are leveraging your investment, silver futures are allow you to contract large sums of money and it is even possible to lose more that your original investment while futures commodity trading. It is important to understand silver futures trading and the related conditions before you enter.


Conclusion
Silver trading can be an extremely profitable futures market. Because of the high demand for silver, this commodity will continue to be a good investment. Learning about the silver futures markets and how they are traded with help you to become a successful trader in the beautiful and desired commodity.

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