Trading Silver Futures : NobleTrading Blog

Monday, February 25, 2008

Trading Silver Futures

Silver is always considered as a good investment especially to hedge against inflation. Silver is the least expensive among precious metals and thus easy to own. Trading silver commodities can offer you many advantages, but as an experienced trader it is better to trade silver futures and options on them. Trading silver futures gives you many advantages.

You are trading with standardized contracts – for both quality and quantity.
Hedging against future price volatility of underlying metal.
Trading leverage allows you to control more valued underlying commodity.
Futures contracts give you more flexibility to go short and long.
No counterparty risks.
No silver metal storage risks.

Like gold futures, silver futures are also traded dollar per ounce. Two types of contracts are available, standard silver futures contact for 5,000 ounces are traded in both COMEX and eCBOT. eCBOT also offers mini silver futures contract for 1,000 ounces. The market is fairly liquid, not as much as gold futures. Remember exchanges set position limits for trades, which vary for hedgers and speculators.

Silver futures options are also available, which help traders to limit trading risks, and also allows traders to practice more profitable (complex) trading practices.

NobleTrading.com Features