Trading in MCX Silver Futures

Silver Futures Definition

Along with Gold Futures, one of the other most popular bullion contracts traded in the MCX commodity markets is Silver Futures. Due to its liquidity and contract specifications, silver commodity futures is a very popular contracts for commodity traders in India. All major exchanges of world offer silver futures, in India MCX – Multi Commodity Exchange and NCDEX are popular exchanges for silver futures trading. On MCX Silver can be traded in various types viz. Silver, Silver mini, Silver micro and Silver1000. Here we’ll discuss silver futures. Just like gold, silver is also a precious metal which gets valued both as a form of currency and store of value. Industrials, Photography and coins and silverwares are major components for silver demand. Fluctuating industrial and store of value demand, government policies on import and exports, currency fluctuation are some of the key factors affecting silver prices. Trading in silver futures is similar to trading in gold futures. Silver futures are nothing but exchange traded standardized contracts between a buyer and a seller in which buyer is bound by an obligatory contract to take delivery of specific quantity of silver (lot) at certain pre-decided price on future date.

Usage of Silver Futures

Since, Silver miners and many silver consumers prefer silver futures to hedge their price. Silver producers can lock in their selling price buy shorting silver future against available inventory. Similarly, silver consumers which include jewellers can fix their purchasing price by going long on silver futures. Silver futures is one of the popular trading product among speculators. By estimating rise or fall in the prices, speculators also buy or short silver futures regularly and prefer cash settlement (settling the difference between buying price of future and price at the time of expiry).

Factors driving Silver Commodity Price and therefore Silver Futures Contracts

• Global macro- economic events such as wars or economic situations can also affect silver prices.
• Specific events with Silver in focus. Factors driving higher demand and therefore higher prices include events such as new production facilities, introduction of new processes whereas factors driving lower supply like unexpected mine closures or plant lockdowns, and restructuring amongst industry players also affect the commodity silver price.
• Other important factors include the Indian and global inflationary scenario and financial crisis/recessions in global economies.

Quick Facts on Silver Commodity Trading and MCX Silver Futures Contract Specifications

Trading Symbol –SILVERDDMMMYYYY Instrument Type – Commodity Futures Lot Size (Units) – 30 KG Initial Margin – 4% or based on the SPAN margin for initiating trading in Silver futures contracts, whichever is higher. To check silver margin requirements for trading in the MCX, check the commodity span calculator. ELM Margin – 1% Silver Price Quote - Based on 1 Kg Underlying asset – Silver. Tick Size - Re. 1 per kg Trading Time – Silver can be traded during the normal MCX market timing.

Trading Silver Futures Live on the SAMCO Trading Platforms

For trading in Silver futures, clients must open a commodity trading account and must activate the exchange segment - MCX. Subsequently, the silver futures contracts can be added and traded on the live trading terminal. Traders must select the Exchange MCX, Instrument Silver and Contract Expiry as desired. Traders have access to the live silver futures prices which are streamed live from the exchanges and can also access intraday silver futures charts and historical silver futures charts. Brokerage for trading Silver Futures With SAMCO, India’s leading discount broker, silver futures, silver micro, silver mini and silver 1000 can all be traded at Flat Rs. 20 per executed order or 0.05% of turnover whichever, is lower. Calculate your savings for trading silver futures on the commodity brokerage calculator. Other Charges applicable while trading Silver Futures

• CTT
• Stamp Duty
• Service Tax
• Exchange Transaction Charges for MCX

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Additional Reference Links

• Gold Futures
• Commodity Markets in India