What are Silver Futures?

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  • Written By: A. Leverkuhn
  • Edited By: Andrew Jones
  • Last Modified Date: 05 September 2019
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When people talk about “silver futures,” they are talking about something that falls under the larger concept of futures contracts. Some of these contracts are also called options, or options contracts. Future contracts are agreements to sell a specific amount of product for a fixed price at a future time, designated by the contract holder. Silver futures are an agreement of this kind regarding a quantity of silver or silver equities.

Precious metals futures contracts, including silver futures, allow investors to speculate on these commodities and make sophisticated investments on them. Silver is a commodity, which means it is a tangible, physical product with concrete value. As a commodity, silver generates a range of silver contracts, in addition to other financial products based on its value.

Those who invest in silver futures are buying the ability to cash in on price changes in silver over a given period of time. Most futures contracts have an “expiration date.” In order to gain from a silver futures contract, the contract holder usually has to exercise the option before expiration. Otherwise, that person can end up owning the amount of silver included in the futures contract whether he wants it or not.


It’s important for investors to understand their options and alternatives for investing in futures like silver contracts. In addition to these kinds of contracts, markets and exchanges have generated many different kinds of silver funds, including silver index funds, silver exchange traded funds or ETFs, and silver exchange traded notes or ETNs. All of these funds use the base price of silver to generate their own continually changing prices, and investors who buy into them are hoping for specific price changes that will produce gain when they sell the funds in the future.

Silver futures are based on a specific price for silver by volume. Investors can get access to current silver prices through public resources connected to national or global exchanges. Then the individual trader can make a decision about how to invest in silver through silver contract futures, silver funds, or other alternatives.

Experts have warned many investors to be cautious about silver futures and other contracts, due to the possibility of commodity volatility. What this means in simple terms is that the price of silver is likely to change quite a bit during any given time period. Rather than reflecting a straight line, the price of silver is expected to fluctuate in more complex ways. That makes silver futures and other investments relatively risky, so investors need to use correct strategies like hedging and diversification if they want to successfully invest in silver contracts.


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