Knowledge Center / Technical Analysis / Mcx Silver Contract Specification
Silver (Chemical symbol-Ag) is a luminous grey-white metal. The main source of silver is lead ore, although it can also be found associated with copper, zinc and gold and produced as a by-product of base metal mining activities
Secondary silver sources include coin melt, scrap recovery, and dis-hoarding from countries where export is limited.
Silver is exceptional in the midst of metals due to the fact that it can be classified as both a precious metal and an industrial metal. Silver is treated as both a valuable and useful industrial commodity and as an investment. It is also an effective portfolio diversifier.
Demand and Supply
Physical silver demand touched record level of 1,170 million ounces (Moz) driven largely by high jewellery and silverware fabrication demand along with silverware demand and investment demand. Silver jewellery demand in 2015 remained remarkably robust, growing at 3.5% year-on-year. Silver’s use in jewellery reached a record high in 2015, with much of that coming from China and India where per capita demand is still low. New functions for silver also stayed firmly on the radar, with a steady stream of announcements in the glass, clothing and hygiene industries.
Benefits of Trading on MCX
India’s leading commodity exchange to trade in bullion futures Highly liquid contracts Deliverable contracts with internationally accepted silver bars. Flexibility to choose from four different contract sizes below table.
|Contracts||Price Quote||Lot Size||Tick Size||P&L/tick||Expiry||Delivery Units|
|Silver Mini||1 kilogram||30 kgs||Rs.1/tick||Rs.30/tick||5th day of expiry month||30 kgs|
|Silver Mini||1 kilogram||5 kgs||Rs.1/tick||Rs.5/tick||Last day of expiry month||30 kgs|
|Silver Micro||1 kilogram||1 kg||Rs.1/tick||Rs.1/tick||Last day of expiry month||30 kgs|
|Silver 1000||1 kilogram||1 kg||Rs.1/tick||Rs.1/tick||Last day of expiry month||1 kgs|
Daily price limits
4% will be the base price limit. As soon as the price limit is violated, the relaxation will be allowed upto 6% without any cooling off period in the trade. In case the daily price limit of 6% is also breached, then after a cooling off period of 15 minutes, the daily price limit will be relaxed upto 9%. In case price movement in international markets is more than the maximum daily price limit (currently 9%), the same may be further relaxed of in steps of 3 % and inform the regulator immediately.
Initial margin SPAN
The current price of Silver May 2018 Future is Rs.38300/- per kg , contract is for 30 kgs (lot size).
The contract value will be = 1,149,000
The margins on Silver is roughly calculated 5% of Exchange Span required to trade this contracts at = 5,745,000
The Profit and Loss calculation following formula –P&L per tick = (Lot Size / Quotation) * Tick Size=Silver (30 kgs /1 kg) * Rs.1/-= Rs. 30/-
Other chargers applicable while trading silver futures