A ONE-STOP PORTAL OF INFORMATION FOR FUTURES AND COMMODITIES TRADERS




Ticker: SI
Exchange: COMEX
Trading Hours:8:25 A.M. - 1:25 P.M. (EST)
Contract Size: 5,000 oz
Contract Months:Jan,Mar,May,Jul,Sep,Dec
Price Quote:$ / oz., 1 cent = $50
Tick Size:50 pts = $25
Last Trading Day: Trading terminates at the close of business on the third to last business day of the maturing delivery month.
Daily Price Limit:Initial price limit, based upon the preceding day's settlement price, is $1.50.


40 Yr Seasonal Chart Long-Term Chart Supply & Demand Tables

Fundamental Overview:

What is it?

Silver, like gold is part of the "precious metal complex" and was once used primarily for its monetary value. Unlike gold, silver's price has become more dependent upon its industrial value rather than its monetary value. Silver's use in coins has been decreased greatly and its use as a financial backing has all but been eliminated.

What are its uses?

Silver is used primarily for its industrial purposes and for the making of jewelry. It is a great conductor of electricity and has a high tolerance to heat and corrosion, making it valuable in such industries as photography (consuming about half of US silver production), communications, and computers. Silver is also used in the medical and dental fields as well as in the making of such things as batteries and mirrors.

Where is it produced?

Most newly mined silver comes from Mexico, Peru, Canada, the US, Australia and Russia. Other than the mining of new silver, a significant portion of the supply of silver comes from the melting of coins, the recycling of camera and x-ray films and jewelry.

What determines the market price?

Silver is a classic example of what is called a "carry basis" market, meaning the futures price of silver is almost exclusively tied to the supply and demand for spot silver and the cost of financing, storage, and insurance over the period until delivery of the futures contract. Supply factors include silver stocks and inventories held by suppliers and users of the metal, as well as the level of production world wide, political factors (i.e. labor strikes at producing mines).

The most heavily traded silver contract is traded on the NYMEX and is based upon 5,000 ounces of .999 fine silver. Since one standard bar of silver is 1,000 ounces, the contract is for 5 bars. The price is quoted in dollars per ounce with a minimum price change of $.001. The delivery months are January, March, May, July, September, December. Both the CBOT and the Mid-AM trade smaller contracts based upon 1 bar of silver.

Notes

As discussed above, the main determinate of silver's price is the supply and industrial demand of the metal. This is not to say, however, that one only needs to watch these fundamentals. Remember silver is a precious metal and will, at times, trade in sympathy with other precious metals, primarily gold. For this reason, it ise advantageous to the trader to keep an eye on the factors that determine the price of gold.






Copyright 2004 FuturesBuzz.com. All rights reserved.
Disclaimer