Silver Futures

Comex Silver Futures are one of the most exciting futures contracts you can trade if you are looking for action. It trades under the ticker symbol SI and the active months are March, May, July, September and December. The months of February and April are commonly listed but there is no trading volume in those contracts.

The Comex merged with the Nymex (NY Merchantile Exchange) on August 3, 1994 then in March 2008 the CME Group purchased the Nymex so Comex Gold and Silver futures now trade on the CME.

Comex Silver Futures trade through open outcry during the session Monday – Friday 8:25 AM to 1:25 PM Central Time. It also trades electronically through the Globex Platform Sunday – Friday 5:00 p.m. – 4:15 p.m. CT with a 45-minute break each day beginning at 4:15 p.m. CT.

The average time for a trade execution through Globex has dropped to 5.5 milliseconds and Globex volume made up about 80% of all futures transactions in 2010.

Silver Futures Contract Specifications:

Contract Size: 5000 Troy Ounces
Minimum Tick: .005 – Each penny move equals $50
The contract trades in U.S. Dollars

This contract settles via Physical Delivery

There are no longer price limits on silver contracts so it can move up or down as much as it wants in a single day.

The trading symbols for the active Silver Futures contracts are:

March – SIH
May – SIK
July – SIN
September – SIU
December – SIZ

The most explosive rally in silver occurred in 1979 – 1980 when silver hit $42 per ounce, a price that still stands as the nominal high 30 years later. Here is a chart showing how crazy prices got in 1980 and how quickly the price collapsed once the peak had been reached.

From August 1979 to January of 1980 Silver went on one of the most stunning price rises in commodity history rising from less than $10 to $42 in a span of a few months. As you can see however, these types of meteoric rises tend to collapse almost as quickly. Within 5 months of the top silver got down to $12 per ounce before bouncing and 18 months after the top were back below $10. Those who bought the peaks are still down 25% or more 31 years later, this is why you have to be careful when you get involved with commodities.

The current price chart for Silver Futures looks similarly bullish, after going sideways for much of 2010 silver blasted off in late August with QE2. By the time it reached it’s peak it was going parabolic and hit the nominal highs established in 1980 around $50. Just as it has done in the past it moved down as fast as it had gone up after reaching the peak.

This Silver chart shows the 20 and 50 day Simple Moving Averages.

My favorite source for commodity charts is Barchart.com

The most actively traded Mini Silver futures contract is an electronically traded contract that trades on NYSE/LIFFE using the ticker symbol YI. This was formerly the Chicago Board Of Trade mini contract but was shed when the CME merged with the CBOT and the NYMEX. Regulators didn’t want the CME Group to control both contracts.

This Mini contract was extremely thinly traded in the early years but has grown popular since the price of silver has started to become more volatile. It now routinely trades 4-5000 contracts per day and has become a favorite of small traders.

This is a 1000 Troy Ounce contract (10 Troy Ounces In A Pound) so each penny move in the price of silver equates to $10. The Comex silver contract by comparison is 5000 ounces so each penny is $50.

Since it’s an electronically traded contract it has extended trading hours from 7:16pm – 5:00pm Eastern Sunday – Friday. The trading is thin in the overnight hours so be careful when you place stop orders. Most trading platforms allow you to control whether your stops are active in the overnight part of the session.

Active trading months (with trading symbols) are:

March – YIH
May – YIK
July – YIN
September – YIU
December – YIZ

The months of February (K) and April (J) are also listed but are not actively traded.

This contract uses Physical Settlement meaning if you stay in the contract until expiration you can be delivered on. However, delivery can only be initiated by the seller so holding it to the bitter end does not guarantee the seller will deliver the silver. In the case of non-delivery the contract would be closed out as a cash settlement.

Source: NYSE LIFFE