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Best Silver Trading Brokers

Silver is a highly valuable metal that finds application in jewelry, tableware, and in a number of industries like medicine and electronics. Besides, it has been used as a currency and an investment option for centuries. Although today the precious metal is mainly used for industrial purposes, silver is a top-traded commodity and the second most invested precious metal after gold.

In like manner to gold, silver is also considered a safe haven during periods of market turmoil or as a hedge against inflation, which is the reason why it enjoys heightened interest from traders. Additionally, it is an attractive investment for traders who want to diversify their portfolios.

There are several instruments traders can use to make the most out of the increases or decreases in the silver prices, including spot prices, shares, futures, and ETFs. As with all other financial instruments, it is best for traders to fully understand what silver trading is all about and what factors might influence its price.

How Silver Trading Works for Traders and Brokers

How Silver Trading WorksSilver is the second most traded precious metal, and the reason why traders and investors prefer silver and gold over the other precious metals is that they retain their value while the value of the other asset classes decreases. During periods of economic uncertainty and volatility, many people tend to turn to silver as a long-term investment and, above all, an inflationary hedge, which turns it into the perfect refuge.

Another reason why traders prefer silver over gold is that it is a much more affordable asset. As for the potential returns of silver trading, the more the silver price moves in the opposite direction than the one you predicted, the greater your losses will be, and vice versa, the further the market moves in the direction you picked, the greater your profit will be.

There are several factors that have an effect on the price of silver, including the industrial demand and its power as a natural resource. World economics, as well as the political uncertainty, can also move the price of silver, and as we said earlier, the value of the other asset classes declines. This is not the case with silver which is considered a store of wealth when compared to other high-risk assets.

Owing to the properties silver has, there is a heightened industrial demand for the precious metal. No matter what the current condition of the business cycle is, many of the silver applications remain impervious to the economic decline.

What traders should know is that just like gold, silver also has an inverse relationship with the US dollar. Thus, the changes in the US dollar’s price will result in an increase or decrease in the silver price.

There are two ways in which you can gain exposure to the price of silver, and these include trading and investing. In order to get ownership of the underlying, you need to invest in that asset. Trading silver, on the other hand, is truly speculative, and there are a number of silver markets one can trade on.

Silver Bullion

Much like with gold, the traditional way to trade silver is also by buying coins or bars. Yet, throughout the years, this way of trading silver lost momentum because of the increase in the insurance and storage costs.

Silver Futures

Silver futures are contracts according to which the precious metal should be at a predetermined price in the future, and both parties involved in the contract are required to uphold their end of it. Trading futures is quite sophisticated since the silver price can be affected by interest rates and storage costs.

Silver Options

Silver options are also derivatives instruments that make it possible to speculate on commodities using leverage. Under these contracts, the holder is not required to trade silver on a set date and for a set price. Silver options are divided into two classes, and they can be calls and puts. While put options allow traders to sell silver, calls give them the right to buy.

The spot price is the price at which the asset is currently traded, and if traders decide to buy it at that price, the asset in question will be exchanged and delivered on the spot. It is worth mentioning, however, that this way of trading silver makes it possible for traders to get exposure to the market without actually owning bullion.

Silver ETFs

ETFs and silver stocks, on the other hand, are the way to go if traders are looking to get indirect exposure to the changes in the price of silver. ETFs are financial instruments many traders might see as the perfect proxy for speculating on silver, but they should keep in mind that the risks, costs, and the funds’ manager are among the things they need to research in advance.

Silver CFDs

Although there are various silver-based instruments that can be used to trade and invest, trading silver with CFDs derivative instruments is what many traders prefer. CFDs are contracts that are made between the broker and the trader that are drawn up in order to attempt to benefit from the difference between the opening and closing trade. There are a number of benefits of trading silver with CFDs, and first and foremost, traders will not be required to pay for storage.

Another reason why traders tend to prefer CFDs over the other options is that they allow them to trade with the precious metal in both directions, which is to say that they can attempt to make the most out of the upward and downward movements in the price. Last but not least, oftentimes, trading silver with CFDs is commission-free. The value of the CFD is based on the difference between its current price and the price at the time when it was purchased.

Silver Trading Brokers

choosing a brokerOnce traders have learned how to take a position on silver, they can proceed with the search for a broker that lives up to their requirements. There are a number of things you should pay attention to before you start trading silver, and these include the trading conditions and costs, regulation and security, the variety of trading options, the funding options, account types, and the broker’s availability for trading on the go, to name a few.

Related Topics


1. What silver trading strategies I can use

There are several strategies traders can make use of when trading silver, and these include scalping, day trading, swing trading, and position trading, which is also known as trend trading. The amount of time traders will be required to commit will be based upon the trading style they go for. Besides, in addition to the trading period, the holding period will also vary.

2. How can I trade silver

Trading silver is possible in several ways, and the options vary from buying and selling physical metal to focusing on derivative financial products. Traders can approach the market through CFDs, futures, options, spots, bullions, stocks, and EFTs.

3. Is is profitable to trade silver

There are a number of reasons why traders prefer to focus on silver during their trading experience, and this is so mainly because it is a hedge against inflation. What traders should consider is that there are a number of factors that will have an impact on the silver price, including the economic outlook, demand issues, and supply, among others. That being said, on certain occasions, traders will manage to turn the fluctuations in its price to their good account and get a good profit.

4. What factors influence the price of silver

There might be different causes for the quickly changing silver prices, including the physical demand, geopolitical events, monetary policy, investment demand, and the economic sentiment, among others. As with all other asset classes, trading silver is quite risky.

5. What is the ticker symbol of silver

Most of the time, spot silver CFDs are traded under the symbol SILVER. Yet, there are also silver trading platforms where the precious metal is listed under XAG/USD.