Silver

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Silver is a traded commodity that is often paired with gold, as two of the top-traded precious metals that previously underpinned the value of the U.S. currency. Silver futures and spot contracts are traded OTC and exchanges such as the CME Group and NYSE LIFFE U.S. Silver reached an all-time high of $49.51 on April 28, 2011, inching past the high set in 1980, when the Hunt brothers attempted to corner the silver market.[1]

Available Products

CME Group's silver futures include a full-sized contract, which is 5,000 troy ounces,[2] as well E-mini silver futures, which were launched in April 2009. E-mini silver futures are sized at 1,000 troy ounces.[3]

NYSE LIFFE U.S., which launched in 2008, purchased the former Chicago Board of Trade's (CBOT) silver and gold futures complex. Included in the deal were mini-silver and full-sized silver contracts which were, and still are, traded on the LIFFE CONNECT electronic trading platform. (LIFFE Connect was licensed by the CBOT, but that deal ended when the exchange was purchased by CME Group.) NYSE LIFFE U.S.'s full-sized silver futures is sized at 5,000 troy ounces per contract, mini-silver futures is sized at 1,000 ounces.[4]

There are also exchange traded funds that focus on silver such as the iShares Silver Trust[5] and the ETFS Silver Trust ETF.[6]


History

After five years of looking into allegations of price manipulation in the silver futures markets, in September of 2013 the CFTC announced that it was closing its investigation without taking any action because, "there is not a viable basis to bring an enforcement action with respect to any firm or its employees related to our investigation of silver markets" the Commission said in a statement.[7] Market participants complained to the CFTC that the futures market prices on CME Group's COMEX were trading at a premium to the prices for retail silver products. They said that silver futures prices should have been trading lower to reflect the decrease in retail prices and alleged that large traders with short open positions in the silver futures contracts were the cause of the unexplainable price discrepancy.

References

  1. Instant View: Silver rises to record, beats 1980 high. Reuters.
  2. Silver Futures. CME Group.
  3. E-mini Silver Futures. CME Group.
  4. Precious Metals Futures. NYSE Euronext.
  5. Silver Trust. iShares.
  6. ETFS Silver Trust. ETFS Silver Trust.
  7. CFTC Closes Investigation Concerning the Silver Markets. CFTC.