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Dava0016
04-08-2012, 09:29 AM
I have asked this before but Im still a little confused. I have had a brokerage account for a while but never really was very active in trading. Recently I have decided to make a couple speculative moves in hopes that at least 1 will be a homerun. I don't have any money invested that i cant afford to lose tho. I really want to invest in silver through speculation but Im having trouble understanding how it works. I have come to the conclusion that there is no ETF that represents silver's spot price and it not the same as 1 share = 1 ounce. Can you only invest in the companies that mine/refine/etc... silver? Is that correct or am I just missing something. I think maybe what Im talking about is under "Options" but I am not familiar at all with them. i just want to buy and sell silver through the market like I do with physical but i guess Silver itself is not a company. Any advice would be appreciated. I know about SLV and some others but not what im looking for. Thank you in advance.

theplantguy
04-08-2012, 09:49 AM
I have asked this before but Im still a little confused. I have had a brokerage account for a while but never really was very active in trading. Recently I have decided to make a couple speculative moves in hopes that at least 1 will be a homerun. I don't have any money invested that i cant afford to lose tho. I really want to invest in silver through speculation but Im having trouble understanding how it works. I have come to the conclusion that there is no ETF that represents silver's spot price and it not the same as 1 share = 1 ounce. Can you only invest in the companies that mine/refine/etc... silver? Is that correct or am I just missing something. I think maybe what Im talking about is under "Options" but I am not familiar at all with them. i just want to buy and sell silver through the market like I do with physical but i guess Silver itself is not a company. Any advice would be appreciated. I know about SLV and some others but not what im looking for. Thank you in advance.

Silver is a commodity, so naturally, there is no company that represents spot price. SLV comes close, but you said SLV isn't what you're looking for. As for ETFs, there are all kinds of them. And they can be bought and sold with a mouse click. If I wanted to speculate in silver, I'd use a 2x-3x ETF or mini-silver contracts. Much more bang for the buck.

Chadilac
04-08-2012, 10:36 AM
You have options galore, you seem not to like Slv, as it doesn't track Silver penny for penny in movement. But it moves proportionately to Silver Spot. For example, if Slv is @ 90% Silver spot, you can expect for each 10 pennys move in Silver spot you will get 9 pennys movement up or down.

Slvr stock is another option, you can compare the two on Yahoo financial, sometimes one of the two isn't tracking properly, some may see this as an oppurtunity or perhaps a longer term hinderance. Slv is the big boy of the etf world check it out here under market fundamentals.

Another way is to trade etfs that roll over future contracts and are leveraged. You can expect them to trade/track silver spot closely as futures are a major determinate of World Silver Spot. These etfs are commonly used in Canada, as no other options are available unless you want to get smoked on currency conversion - Cad:Usd by your greedy brokerage house. These etf's like Hzu in Canada trade at 2x spot. Similar versions are available in the States also some as high as 3x leverage.

Then there are Cef closed end funds, like Cef which holds gold and silver. Then there is Sprouts Phys which holds the metal as the other etfs claim to do the same. with Cefs one needs to be aware at what premium they trade to Nav net asset value. The day I called, it waz trading at a 30% premium to Nav. So that would be like paying 30% extra to your favorite Bullion dealer. The day I called, happened to be the highest it has ever traded premium to Nav. The median number waz closer to the low 20% range for the course of the fund. Also don't think about converting your fiat to physical with Sprout as you need to hold @ least 3 - Comex good delivery bars there, 3000 oz minimum if I remember correctly.

I use Hzu and Wite an American physical etf that holds 50% Silver 25% Platinium and 25% Pladium. It has a fairly high bid/ask spread but I am long it so no worries.

Streaming companies like Slw Silver Wheaton is another way to play Silver fairly safely, they pay rediculously low prices for Silver; as they allocate money for the right to buy it from the mine for the life of mine. Normally it's a by-product of the mines; mines are occasionally cash hungry so some complete this one sided deal. Slw holds 95% contracts for silver by-product and only 5% trash gold as the Ceo put it, lol. Slw is cheap now, as are all miners perhaps a once in a lifetime chance to own.

Dava0016
04-08-2012, 01:09 PM
Thank you so much for that detailed info. So far I have had more success than I expected from trading on the market so far, so i don't want to get caught being over confident. I actually think SLV is what I am looking for, i just didn't realize it. The whole % thing was what threw me off because it was so close to spot yet not exact and the info I had read on it led me to believe that the two prices were not moving in correlation together.

The only question or clarification I need is on what you said about the price of SLV being like 90% of spot, earning 9 cents on every 10. When looking at the charts it seemed like the price was more like a % of the price fluctuations and not the actual spot. Im not sure if I am articulating this correctly because it sounds like both would result in the same but if you understand what i am asking, than that should take care of any more concerns I have as of now. thank yall for taking the time to help me out on this. And i will being looking into some mining companies. i have had Wheaton on my watch list but will look for some others as well.

Ryanferr
04-08-2012, 04:38 PM
SLV does a very good job at tracking spot. Here is a chart comparing the two:

SLV is the black line, spot is the red

http://img560.imageshack.us/img560/3792/slv.png (http://imageshack.us/photo/my-images/560/slv.png/)