Silver Spread Betting Guide

Silver Spread Betting Guide

Silver Spread Betting Guide

arrow_forwardLive Silver Chart
arrow_forwardLive Silver Prices
arrow_forwardWhere to Spread Bet on Silver
arrow_forwardHow to Spread Bet on Silver


Live Silver Chart and Prices



Where Can I Spread Bet on Silver?

Most of the FCA regulated spread betting companies offer live prices and charts on commodity markets like Silver.

See the commodities comparison table below.


Silver Spread Betting Comparison

Company Commodities
Min Stake
Gold
Spread
Silver
Spread
US Crude
Spread
UK Crude
Spread
Crude Diff.
Spread
Apply
Financial Spreads Review £0.50 4 3 3 3 3 Apply
City Index Review £0 4 (+) 2.5 (+) 5 (+) 5 (+) n/a Apply
ETX Capital Review &pound:0.50 6 3 6 6 Apply
IG Review £1-5 3 3 3 3 no Apply
InterTrader Review &pound:1 Variable Variable Variable Variable Variable Apply


How to Spread Bet on Silver

Let’s suppose you are considering taking a position on Silver, so you look at a financial spread betting site, like Spreadex, and they are offering the latest market price priced at:

Silver (March) Futures: $33.78 – $33.81

Here is an example of how a futures spread betting market works

Spread Trading Market Silver (March) Futures
Spread Betting Price $33.78 – $33.81
How the Spread Works Now you can trade on the Silver Futures market settling:

  arrow_upward  Higher than $33.81, or
  arrow_downward  Lower than $33.78

At the close of trading on the settlement date for this ‘March’ futures market, 24 February 2012.

It is important to remember that, as this is a futures market, your spread bet will be automatically closed when the March Silver futures expire, 24 February 2012. However, you can close your trade prior to the expiry date.
Units (Points) Traded With futures markets, financial spread bets on the Silver market are made in £x per cent.

Where a cent is $0.01 of the commodity’s price movement.

E.g. if Silver changes by 35¢ ($0.35) then you would win / lose 35 times your stake.
Stake per Unit You work out how much you would like to stake per cent, e.g. £2 per cent, £3 per cent, £8 per cent etc.
Staking Example For example, if you have a stake of £3 per cent and Silver moves by $0.33 (33¢), you would lose / win £3 per cent x 33¢ = £99.


Fully Worked Example | Buying Silver

Financial spread trading on the metal to go up in value

You Now Consider Whether to Go Long or Short Where do you think Silver will close on 24 February 2012:

  arrow_upward  Higher than $33.81? or
  arrow_downward  Lower than $33.78?

Let’s Assume You Decide to Buy   arrow_downward  Higher than $33.81
You Choose How Much to Risk, Opting for £3 per cent
So Now What?
  • You will make £3 for each cent ($0.01) Silver closes higher than $33.81
  • You make a loss of £3 for every cent ($0.01) Silver closes below $33.81
If You Are Speculating on a Market to Go Up Your Profit or Loss = (Closing Level – Opening Level) x stake per cent
 
Trading Example 1 Silver rises and the quote for the financial spread betting market becomes $34.18 – $34.21.
Take a Profit? You could choose to keep your bet open until expiry or close it, i.e. close your position for a profit. In this instance you choose to settle your bet now by selling the market at $34.18.
Your Profit or Loss = (Closing Level – Opening Level) x stake per cent
($34.18 – $33.81) x £3 per cent
$0.37 x £3 per cent
37¢ x £3 per cent
Your Profit or Loss = £111 profit
 
Trading Example 2 Silver drops and the financial spread betting market adjusts and moves to $33.49 – $33.52.
Limit Your Loss? You could opt to keep your futures trade open until expiry or close it in order to restrict your loss. For this example, you choose to close your position early by selling at $33.49.
Your Profit or Loss = (Closing Level – Opening Level) x stake per cent
($33.49 – $33.81) x £3 per cent
-$0.32 x £3 per cent
-32¢ x £3 per cent
Your Profit or Loss = -£96 loss


Trading Example | Taking a Short Position on Silver

Spread trading on the metal to move lower

You Now Work Out Whether to Go Long or Short Does your research lead you to believe that Silver will finish at on 24 February 2012:

  arrow_upward  Higher than $33.81? or
  arrow_downward  Lower than $33.78?

Let’s Assume You Go Short   arrow_downward  Lower than $33.78
You Select Your Stake Size, Let’s Say You Opt For £2 per cent
So What Now?
  • You make a loss of £2 for every cent ($0.01) Silver settles higher than $33.78
  • You will make £2 for every cent ($0.01) Silver settles below $33.78
If You Are Betting on a Market to Decrease Your Profit or Loss = (Opening Level – Closing Level) x stake per cent
 
Trading Example 3 Silver moves lower and the spread trading market changes to $33.32 – $33.35.
Take Your Profit? You could now choose to keep your bet open until expiry or close it to lock in a profit. In this instance you decide to close your position at the current rate and buy the market at $33.35.
Your Profit or Loss = (Opening Level – Closing Level) x stake per cent
($33.78 – $33.35) x £2 per cent
$0.43 x £2 per cent
43¢ x £2 per cent
Your Profit or Loss = £86 profit
 
Trading Example 4 Silver goes higher and the spread betting market is moved to $34.12 – $34.15.
Time to Restrict Your Loss?At this point, you may choose to keep your position open until expiry or close it and limit your loss. In this example you opt to close your bet at the current quote and buy at $34.15.
Your Profit or Loss = (Opening Level – Closing Level) x stake per cent
($33.78 – $34.15) x £2 per cent
-$0.37 x £2 per cent
-37¢ x £2 per cent
Your Profit or Loss = -£74 loss


Silver Notes:

  • Online spread betting price from Tradefair: 1 February 2012
  • Silver is traditionally priced in dollars per troy oz
  • Many spread betting firms will also allow you to speculate on Silver in euros/cent and US dollars/cent
  • Financial spread betting also allows you to gain access to a large variety of other asset classes, for more information please refer to:


AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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