How to buy/sell silver on TradeStation
Okay so for your own reasons you have decided you'd like to buy/sell silver. That's a good start. Let's see what lies ahead of you before you can officially state that you have a position in silver. If you'd like to buy/sell silver, there are two important things you need to do:
- Decide which forms of silver you would like to trade.
- Find a broker that provides that form of silver and provides conditions that suit your needs.
Below we will go through the pros, cons, potential fees of each product category, including silver ETF, silver forex, silver CFD, silver futures, and silver options.
Silver is an available investment at TradeStation, you can use the following vehicles to invest into silver:
- Silver ETF
- Silver options
- Silver futures
Ways to buy/sell silver on TradeStation
Silver ETF
What is a silver ETF?
A silver ETF is an exchange-traded fund (ETF) that focuses on silver investments. An ETF is a collection of securities (stocks, bonds, commodities and other assets) that often tracks an underlying index. ETFs are similar to mutual funds, however, they are listed on exchanges, and ETF shares trade throughout the day just like an ordinary stock. This is an easy way for investors to gain exposure to the price of silver, without the inconvenience of storing physical bars of the metal. Silver ETFs track usually either physical silver or companies that are related to silver. A side note here: securities that track commodities, such as physical silver are usually called ETC or exchange-traded commodity. If you would like to learn more about ETFs, feel free to check this article about how to buy ETFs online.
| Can you use leverage or go short? | No, unless you use a margin account |
| What can be the important costs? | Commission, Custody fee, Spread, Fees charged by ETF issuers (e.g. expense ratio) |
| Ticker(s) of silver ETFs* | SLV, SIVR, SIL. AGQ |
| Further things to consider | Liquidity is usually high Wide range of silver ETFs available |
*These are some of the largest silver ETFs based on assets under management
Silver options
What is a silver option?
A silver option is a financial instrument that is a derivative based on the value of silver. Silver options are traded through the Chicago Mercantile Exchange (CME), trading under the symbol SO. An options contract offers the buyer the opportunity to buy or sell—depending on the type of contract they hold—the underlying asset.
- Call option of silver means a financial contract that gives the owner the right, but not the obligation to buy silver at a specified price within a specific time period.
- Put option of silver means a financial contract that gives the owner the right, but not the obligation to sell silver at a specified price within a specific time period.
If you would like to learn more about futures option trading, read this article.
| Can you use leverage / profit form price decrease? | Yes, with a put option |
| What can be the important costs? | Spread, Commission |
| Ticker(s) of silver option | SO |
| Further things to consider | Great risk management tool if appropriately used |
Silver futures
What is a silver futures?
Silver futures are derivative financial contracts that obligate the parties to transact an asset at a predetermined future date and price. Similar to silver forex, silver CFD, and silver options, silver futures are leveraged and complex products. The buyer must purchase or the seller must sell the underlying asset at the set price, regardless of the current market price at the expiration date. Underlying assets include physical commodities or other financial instruments. Silver is one of the commodities you can trade as a future. In the U.S., silver futures are primarily traded on COMEX (Commodity Exchange).
| Can you use leverage / go short | Yes |
| What can be the important costs? | Spread, Commission |
| Ticker(s) of silver futures | SI (+month and year) |
| Further things to consider | Liquidity is high, high margin requirement |
Bottom line
We have given you a rundown of the main instruments available at TradeStation for investing in silver. Each one has different features and their availability varies from broker to broker. If you are interested in other vehicles, want to check out brokers that offer these instruments or want to read more about the history of silver, take a look at our article.
If silver is not your favorite in the precious metals asset class, check out our article on investing in gold.
Should you decide to invest in silver, bear in mind that these trades involve a certain amount of risk. We strongly suggest that you contact an investment advisor, as this article is not meant to be investment advice.
Leverage is a double-edged sword and can dramatically amplify your profits. It can also just as dramatically amplify your losses. Trading foreign exchange/CFDs with any level of leverage may not be suitable for all investors.
The information provided in this review do not constitute and should not be regarded as an investment advice.
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