Commodity Trading - Trading Silver
Keywords: commodity trading, trading silver, silver, online trading, trading, commodities
Silver is a commodity that is attractive to many investors because of its unique qualities. It is much like gold and some other commodities because private investors can actually take delivery. However, it is unlike gold in two respects. One, the price of silver is feasible and within reach. Two, physical storage can be obtained without much of a problem and security can be simplified. Often a bank safe deposit box is sufficient.
The ability to take delivery of a commodity increases the choices in trading strategies. There is room for hedging by using a combination of spot and futures contract trades. Pure spot trading with local merchants is also more of a possibility. Spot trading is a term that means the buying and selling of the actual commodity. This is different from the trading of futures contracts because the delivery of the commodity is generally rare.
Silver also has the advantage of bearing a relatively low price per ounce. For many years, silver has traded for anywhere from $5 to $15. These lower prices make silver easier to acquire and more accessible to the average investor. Investors can obtain quantities that are large enough to show desirable returns due to this low amount.
For someone who is accustomed to trading stocks on a regular basis and who may have reached the occasional astronomically high returns, this may not sound like such a great deal. However, when inflation is factored in, even the high return stock prices may not look so appealing. Silver is much like gold in that is provides an accurate measure of real market prices.
The Commodity Exchange of New York (COMEX), a division of the New York Mercantile Exchange and in other exchanges, the standard contract size for futures in silver is 5,000 troy ounces. To put this in perspective, a troy ounce is 1.1 times the common avoirdupois ounce that is commonly used in standard measurements like cooking and packaging.
The minimum price fluctuation, known as a tick, is $0.005 per troy ounce. One tick that is the minimum of 5,000 troy ounces, is worth $25. When compared to mainstream stock prices that range from $0.10 to $0.20 per share, it presents a drastically different landscape. However when those same shares are multiplied one hundred fold to represent 100 shares, it brings the investment into a more “typical” range. While some are larger and some are smaller, this does, indeed, represent a normal amount in commodities trading.
A standard price quote may appear as:
Contract Date Last Change Open High
Jun ‘06 (SIM06) 1014.8 -3.7 1013.8 1014.8
Low Date/Time
1012.8 12:29
To break down the price quote, the contract date indicates the contract’s month and year. The precise date is set by the exchange. The characters that are in parentheses represent a standard abbreviation for a futures contract. The abbreviation “SI” is silver, “M” represents the month of June and 06 indicates the year of 2006. The other figures show familiar price quote columns.
The prices of the silver are broken down to cents per troy ounce. This means that 1014.8 is the equivalent of $10.148 per ounce. This means that one contract that is $10 per ounce for 5,000 ounces bears an investment value of $50,000. This may be a little steep for the casual or average investor. This is one of the primary reasons that futures and options that allow investments of approximately 5% of that amount are so popular.
One drawback to silver investments is that the prices, like nearly any other commodity, are volatile. May 2006 saw some rather significant fluctuations, peaking at more than $15 per ounce, the dropping back to $10 per ounce. Bottom line, though, with any type of trading, the absolute price is not what is important. In fact, it is not even the trend alone that has magnitude in the market. The profits on investments are measured by the difference between the buying price and the selling price. This is what makes timing so crucial.
Visit www.123onlinetrading.com to find more great information about online commodity trading. Besides a large selection of free educational articles you can also find powerful books about online trading in general.
Previous Articles Highlighter:
Forex Trading - Profit And Loss Calculations (1)
When the US dollar is the base currency, let's say you buy 100,000 units of USD/JPY (Japanese yen) at 117.22. The price goes up and you sell at 117.35.
Forex Trading - To Avoid Failure In The Forex Market, Try These Tips (2)
4. New investors don't focus. Although it depends somewhat on the broker you use, you can likely trade in dozens of currencies. However, when you're just starting out, pick just a few to focus on that you can become familiar with.
Underlying Truths About No Annual Fee Credit Cards (3)
Make sure that you carefully study all the credit card offers and features as well as understand all the written statements in your application forms before signing the contract. It is true that the card issuers might offer you a credit card without an annual fee within a period of one year but when it expires, it will overly charge you with a higher percentage on interest rates.
Make Money In A Down Market Buying Abandoned Houses (4)
While buying such abandoned properties, rarely does the seller ask your credit report. Generally the seller is open to innovative strategies, as they will help him to get rid of his abandoned assets.
The Art Of Negotiating A Perfect Real Estate Deal (5)
Their first quote may be more advantageous than your own offer. .. It allows you to be aware of their position before you give them any information from your side.
Asheville Real Estate Is A Perfect Choice For Family (6)
If you like to fish or swim this region has many lakes and rivers. If you would like to live in the area year-round, be sure to check out the abundant water-front real estate on the local rivers and lakes.
Options Trading 101 (7)
Most investors do hold their options until the mature then they trade the underlying asset. Say the buyer purchased a call option at $2 on a stock with a strike price of $25.
Success In Real Estate Depends On Your Team (8)
A real estate attorney is considered to be one of the most essential members of a team venturing into the realty scene. .. Title Rep or an Escrow officer: Having an efficient title rep or an escrow officer is considered to be a plus point for the team.
Wholesaling- A Good Strategy For Real Estate Investors (9)
However, in the absence of a decided exit strategy, they are at a loss to understand what to do after they have completed a real estate bargain deal. The trick to a successful real estate investment is to predetermine an exit strategy right at the time of the purchase.
How To Carry Out A Proper Real Estate Appraisal (10)
Evaluation and description of the real estate market in a particular area. .. Statements related to the issues the appraiser thinks can be harmful for resale of the property or its value for instance poor access to the property.
Loan Guru: Debt Consolidation Can Never Be A Mistake (11)
There might be student loans, home loans, personal loans or even credit card payments. When it comes to all of these, there will be confusion about which one to pay and when to pay it.
Loan Guru: Home Equity Investments (12)
The home equity investment is a wise choice as in most cases the price of a piece of land and the constructed house only increases with time. There are a number of ways by which one can make a better investment.
Property Repossessions 'Predicted To Grow' (13)
According to Mark Lance, spokesperson for the Repossession Specialist, the impact of the Bank of England's monetary policy committee (MPC) increasing the base rate of interest by 1.25 percentage points over the last year "has lead to three-figure increases on homeowners' mortgage payments".
Consolidation Loans Advised For Those Struggling With Credit Card Costs (14)
He also pointed out: "Sometimes you can actually be turned down for a mortgage based on that". Earlier this year, a study carried out by Mintel showed that consumers are underestimating how much money they owe.
Property In Romania - Buying Property In Romania (15)
Keywords: property in Romania, property Romania, real estate Romania, Bucharest real estate, business property It is known that the Romanian market is going through an adjustment period because of the tight standards imposed by the European Commission which allows this country to join the European Union as of January 2007.
Are Credit Cards Killing Your Budget? (16)
Begin right now and don't give up until you are feeling comfortable that you are meeting your obligations without difficulty. You CAN do it! Jude Wright is the owner of "Fixing Poor Credit" at FixingPoorCredit.com, where you can find information on how to get, and stay, out of debt.
Loan Guru: Debt Consolidation Companies (17)
The last thing that needs to be considered when entering into any agreement with a debt consolidation company is how many lenders and creditors they work with. A good company will be willing to work with as many lenders as possible to reduce the debt and put the borrower on the path to financial freedom.
Loan Guru: Get Rid Of All Your Loans With Debt Consolidation (18)
So, for a low rate of interest, a person should first make sure that he/she has cleared all his/her previous loans. A debt consolidation loan can be easily taken against a home.
Loan Guru: Disadvantages Of A Home Equity Loan (19)
Any interest applied to the amount of the loan that is worth more than the home is also not tax deductible. A home equity loan doesn't make good financial sense when the value of the loan is worth more than the home as the borrower is just putting themselves further into debt instead of working to get out of debt.
The Tortoise Has Retired, The Hare Is Still Running (20)
Junior tortoises had grown up in a frugal environment and lived within their salaries. Junior hares found they could not get the lifestyle they were accustomed to on their meagre salaries.
Newer Articles Highlighter:
Choosing Your Motorbike Insurance Policy (1)
The boring bit is you will have to fill different motorcycle insurance quote forms in each time, asking the same information. Remember to be prepared and have any information you need to hand as in order to provide you with an accurate motorbike insurance quote various items are required - details of any convictions you have, any accidents or claims, how much no claims bonus etc etc.
Determining Commercial Property Market Value (2)
The KISCL program, www.kiscl.com uses the resources of seasoned real estate pros to help you determine commercial property market value and much more. The commercial market is strong and a great way to increase your bottom line.
Investment Property Mortgage Loan Ratios (3)
The debt ratio will be your own personal monthly housing expenses divided by your own personal monthly gross income. The debt ratio shows the lender how much money you have personally which is not already allocated to your living expenses each month.
Guaranteed Approval Credit Cards For Bad Credit (4)
This is obviously something you should consider when selecting the best credit card for bad credit. Compare some variables such as enrolment fee, APR, credit limit, and any benefits: emergency cash transfer, extended warranty protection, etc.
Two Tips On How To Create A Win-Win Owner-Financed Real Estate Deal (5)
If you manage the contract and your buyers right, owner financing can be a win-win for both you and the buyer. But failure to do so can result in some nasty problems.
Need A Student Loan? Three Kinds Of Student Loan For You (6)
The process of applying for a Stafford Loan differs in a second way from the application process for other student loans - and application for a Stafford Loan does not require a credit check.
Use An Investment Property Calculator To Evaluate Properties (7)
Many mortgage calculators also do not take into consideration many of the important tax issues you will be faced with. They do not see any rebates you might receive, or any tax deductions which you may be eligible to claim which would reduce your overall tax obligation While investment property calculators can be very valuable tools for you to use, you will want to understand that they do have some limitations and as always you will want to consult with professional tax accountants when necessary.
Successful Commercial Property Analysis (8)
Another consideration is the rental rate of other commercial properties in the area. If many properties are sitting vacant that is a sign that you may have serious trouble renting to a business and keeping them for the long-term.
For The Best Property Investment Loan, Know Your Ratios (9)
Your preparation will make them more likely to do business with you. The first consideration your lender will want to look at is the loan-to-value ratio (LTV). The LTV is the same as you might associate with residential lending.
The Truth About Credit Card Checks (10)
As mentioned earlier they are not free, so you are better of using them during the promotional period when they are free, or else for emergency purposes. Before you use any credit card, not just credit card checks, you should read the terms and conditions of the card and clearly understand the charges that are involved, and also the APR that you will incur when you make check payments or other larger payments.
How You Can Turn One Dollar Into Eight (11)
The study says that any dollar you save at the age of 25 will be worth $8 at the age of 65. So if you have $10,000 in the bank at age 25, you will have $80,000 by the time you're 65.
Know The Modified Rate Of Return (MIRR) Of Your Investment (12)
The Internal Rate of Return (IRR) The internal rate of return, separate from the "modified" version, has long been used to determine whether or not it is a good idea to make a long term investment.
Advantages Of Charitable Trusts To Businesses (13)
However, it will also pay for the expenses of the owner. - Charitable trusts are very handy if there is a sudden demise of the owner of the assets.
Should You Invest In 529 College Savings Plans? (14)
As such, it is an exceedingly good idea to go ahead with such an investment for your child, as you cannot guarantee how you will be financially placed a decade later when your child's college education will probably begin.
Penny Stocks Can Make You Money (15)
3) Consumer Demand: Will there be a demand for what the company is selling? Sometimes a company has a great new invention or an exciting technology, but if it is not something practical that consumers are going to want or need, then it does not matter how great it is.
How To Find Real Estate Leads For Agents (16)
Try to set up partnerships with the seller of the raw land and her developer to offset the developers out of pocket costs while gaining controlling interest of the land 3.
College Is Expensive -- Here Are 3 Ways To Make It Work (17)
Another way to save is to complete a 4-year degree in just three years." Earning college credit through high school AP classes or other means is a great way for your child to cut down the amount of time it will take him or her to earn a degree.
General Identity Theft Statistics Revealed (18)
The identity theft victims naturally spend 175 hours to use for their personal time and about $800 just to clear their names and restore their credit history. The Federal Trade Commission have estimated that a victim will spend 14-16 months of clearing their names in cases of identity theft.
Saving Money Can Be Enjoyable For Those In Texas (19)
While young people may not want to think about it, savings is a great way to get in a habit that will follow them into later years. Indeed, in one survey, more than 23% of today's elderly said they failed to save and strategically use their money for preparing their way to retirement.
Principles On How To Find A Good Credit Card (20)
Know what periods are exactly covered because it might shock you to find out that you already have overhead charges. Make an assessment regarding the future interest rates after the trial periods.