Options Silver Futures

Silver has many uses. It is sought after as a valuable and practical industrial commodity, and is also an appealing investment option. The New York Mercantile Exchange merged with the Commodity Exchange, Inc., (COMEX) in August 1994 to become the world's largest physical commodity futures exchange. It is the dominant exchange for futures and options trading in Gold, Silver, Copper, Platinum and Palladium futures. It also trades in energy futures and options. The Exchange's liquidity, price transparency and financial integrity make it a benchmark for markets worldwide.

Silver Options

Because of the global nature of the metals markets, prices can be volatile - in fact, they seldom are. The metals industry and other commercial market participants have learned to cope with this price uncertainty by actively hedging against adverse price movements. While futures are among the primary risk management tools available, options on futures open a host of versatile, economical trading strategies.

Silver Futures

Futures contracts are firm commitments to make or accept delivery of a specified quantity or quality of a commodity during a specific month in the future at a price agreed upon at the time the commitment is made. Approximately 1% of silver futures contracts traded each year result in delivery of the underlying commodities. Traders generally offset their futures positions before their contracts mature. The difference between the initial purchase or sale price and the price of the offsetting transaction is actually the profit or loss.

Trading in COMEX (Commodity Exchange) silver futures is conducted for delivery during the months of January, March, May and September. A 24-month option is added on a July and December cycle. The options are American-style and can be exercised at any time up to expiration.

By using options alone, or in combination with futures contracts, strategies can be found to cover virtually any risk profile, time horizon or cost consideration.

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