{"id":75492,"date":"2025-10-29T15:08:17","date_gmt":"2025-10-29T09:38:17","guid":{"rendered":"https:\/\/www.5paisa.com\/finschool\/?post_type=markets&#038;p=75492"},"modified":"2025-10-29T15:10:57","modified_gmt":"2025-10-29T09:40:57","slug":"silver","status":"publish","type":"markets","link":"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/silver\/","title":{"rendered":"Silver"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"75492\" class=\"elementor elementor-75492\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-23ba90b elementor-section-full_width tab_container elementor-section-height-default elementor-section-height-default\" data-id=\"23ba90b\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column 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href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/an-overview-of-commodities-market\/\">Commodities Market <\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/gold-part-1\/\">Gold Part-1<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/gold-part-2\/\">Gold -Part 2<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/silver\/\">Silver<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/crude-oil\/\">Crude Oil<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/crude-oil-part-2\/\">Crude Oil -Part 2<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/crude-oil-part-3\/\">Crude Oil-Part 3<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/copper-and-aluminium\/\">Copper and Aluminium<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/lead-and-nickel\/\">Lead and Nickel<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/cardamom-and-mentha-oil\/\">Cardamom and Mentha Oil<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/natural-gas\/\">Natural Gas<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/commodity-options\/\">Commodity Options<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/cross-currency-pairs\/\">Cross Currency Pairs<\/a><\/li><li><i class=\"fa fa-chevron-right\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/government-securities\/\">Government 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     <i class=\"far fa-edit\"><\/i>                                                            \n                                                            <span class=\"eael-tab-title title-after-icon\" >Study<\/span>                            \n                                                    <\/li>\n                                            <li id=\"slides\" class=\" eael-tab-item-trigger eael-tab-nav-item\" aria-selected=\"false\" data-tab=\"2\" role=\"tab\" tabindex=\"-1\" aria-controls=\"slides-tab\" aria-expanded=\"false\">\n                            \n                                                                <i class=\"fas fa-book-open\"><\/i>                                                            \n                                                            <span class=\"eael-tab-title title-after-icon\" >Slides<\/span>                            \n                                                    <\/li>\n                                            <li id=\"videos\" class=\" eael-tab-item-trigger eael-tab-nav-item\" aria-selected=\"false\" data-tab=\"3\" role=\"tab\" tabindex=\"-1\" aria-controls=\"videos-tab\" aria-expanded=\"false\">\n                            \n                                                                <i class=\"far fa-eye\"><\/i>                                                            \n                                                            <span class=\"eael-tab-title title-after-icon\" >Videos<\/span>                            \n                                                    <\/li>\n                                    <\/ul>\n            <\/div>\n            \n            <div class=\"eael-tabs-content\">\n\t\t        \n                    <div id=\"study-tab\" class=\"clearfix eael-tab-content-item active-default\" data-title-link=\"study-tab\">\n\t\t\t\t        <p><div class='white' style='background:rgb(255, 255, 255); border:solid 0px rgb(255, 255, 255); border-radius:0px; padding:0px 0px 0px 1px;'>\n<div id='text_slider' class='owl-carousel sa_owl_theme owl-pagination-true' data-slider-id='text_slider' style='visibility: visible;visibility:visible;'>\n<div id='text_slider_slide01' class='sa_hover_container' data-hash='The\u2013Bullion\u2013Twins\u2013Gold\u2013and\u2013Silver\u2013in\u2013Sync' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>10.1 <\/strong><strong><b>The Bullion Twins \u2013 Gold and Silver in Sync?<\/b><\/strong><\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Exams-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Exams-rafiki.svg\" \/><\/a><\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, I\u00a0have noticed that when gold moves, silver often follows. Are they really that closely linked?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0That\u2019s a great observation. Gold and silver do share a strong correlation, but silver tends to be more volatile.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So traders use both together?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Exactly. Some even use pair trading strategies\u2014buying one and selling the other when their prices diverge. Let\u2019s look at how they\u2019ve behaved recently.<\/p>\r\n<p>Gold and Silver, India\u2019s most beloved precious metals are often assumed to move in tandem. This belief has given rise to strategies like pair trading, where traders exploit temporary divergences between two correlated assets. But does this assumption hold true in today\u2019s market?<\/p>\r\n<p>Let\u2019s investigate using fresh data from October 2025.<\/p>\r\n<p>&nbsp;<\/p>\r\n<p><strong><b>Latest Market Snapshot (October 21, 2025)<\/b><\/strong><\/p>\r\n<table style=\"height: 187px\" width=\"370\">\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Metal<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>MCX Futures Price<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Monthly Change<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Gold<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91,30,588 per 10 grams<\/p>\r\n<\/td>\r\n<td>\r\n<p>+\u20b98,000 (\u21916.5%)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91,70,415 per kilogram<\/p>\r\n<\/td>\r\n<td>\r\n<p>+\u20b928,270 (\u219119.8%)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<p>Both metals have surged this month, driven by:<\/p>\r\n<ul>\r\n<li>Festive demand (Dhanteras &amp; Diwali)<\/li>\r\n<li>A weakening US dollar<\/li>\r\n<li>Global safe-haven buying amid geopolitical uncertainty<\/li>\r\n<\/ul>\r\n<p><strong><b>Correlation Check: Do Gold and Silver Still Move Together?<\/b><\/strong><\/p>\r\n<p>Using 30-minute intraday data over the past 3 months (over 1,000 data points), the correlation coefficient between normalized gold and silver prices is approximately: 0.71<\/p>\r\n<p>This confirms a strong positive correlation, meaning gold and silver generally move in the same direction. However, silver continues to show greater volatility, often amplifying gold\u2019s moves.<\/p>\r\n<p><strong><b>What This Means for Traders<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Gold<\/b><\/strong>offers stability and smoother price action<\/li>\r\n<li><b><\/b><strong><b>Silver<\/b><\/strong>provides sharper swings and higher short-term trading potential<\/li>\r\n<li>Pair trading setups remain viable, especially when short-term divergence occurs.<\/li>\r\n<\/ul>\r\n<p><strong><b>Gold vs Silver \u2013 Latest Price Comparison Table (Intraday Snapshot)<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td width=\"200\">\r\n<p><strong><b>Timestamp<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"134\">\r\n<p><strong><b>Gold Close (\u20b9\/10g)<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"115\">\r\n<p><strong><b>Gold % Change<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"166\">\r\n<p><strong><b>Gold Normalized<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"146\">\r\n<p><strong><b>Silver Close (\u20b9\/kg)<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"147\">\r\n<p><strong><b>Silver % Change<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"173\">\r\n<p><strong><b>Silver Normalized<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td width=\"200\">\r\n<p>21 Oct 2025 09:30<\/p>\r\n<\/td>\r\n<td width=\"134\">\r\n<p>\u20b91,28,005<\/p>\r\n<\/td>\r\n<td width=\"115\">\r\n<p>+0.78%<\/p>\r\n<\/td>\r\n<td width=\"166\">\r\n<p>0.982<\/p>\r\n<\/td>\r\n<td width=\"146\">\r\n<p>\u20b91,57,240<\/p>\r\n<\/td>\r\n<td width=\"147\">\r\n<p>+0.41%<\/p>\r\n<\/td>\r\n<td width=\"173\">\r\n<p>0.924<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td width=\"200\">\r\n<p>As 21 Oct 2025 11:30<\/p>\r\n<\/td>\r\n<td width=\"134\">\r\n<p>\u20b91,28,556<\/p>\r\n<\/td>\r\n<td width=\"115\">\r\n<p>+0.43%<\/p>\r\n<\/td>\r\n<td width=\"166\">\r\n<p>0.985<\/p>\r\n<\/td>\r\n<td width=\"146\">\r\n<p>\u20b91,58,100<\/p>\r\n<\/td>\r\n<td width=\"147\">\r\n<p>+0.55%<\/p>\r\n<\/td>\r\n<td width=\"173\">\r\n<p>0.930<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td width=\"200\">\r\n<p>21 Oct 2025 13:30<\/p>\r\n<\/td>\r\n<td width=\"134\">\r\n<p>\u20b91,29,200<\/p>\r\n<\/td>\r\n<td width=\"115\">\r\n<p>+0.50%<\/p>\r\n<\/td>\r\n<td width=\"166\">\r\n<p>0.990<\/p>\r\n<\/td>\r\n<td width=\"146\">\r\n<p>\u20b91,59,250<\/p>\r\n<\/td>\r\n<td width=\"147\">\r\n<p>+0.73%<\/p>\r\n<\/td>\r\n<td width=\"173\">\r\n<p>0.938<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td width=\"200\">\r\n<p>21 Oct 2025 15:30<\/p>\r\n<\/td>\r\n<td width=\"134\">\r\n<p>\u20b91,30,588<\/p>\r\n<\/td>\r\n<td width=\"115\">\r\n<p>+1.07%<\/p>\r\n<\/td>\r\n<td width=\"166\">\r\n<p>1.000<\/p>\r\n<\/td>\r\n<td width=\"146\">\r\n<p>\u20b91,70,415<\/p>\r\n<\/td>\r\n<td width=\"147\">\r\n<p>+1.78%<\/p>\r\n<\/td>\r\n<td width=\"173\">\r\n<p>1.000<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>\u00a0<\/b><\/strong><\/p>\r\n<p><strong><b>\u00a0Key Observations<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Gold<\/b><\/strong>showed steady intraday gains, rising from \u20b91,28,005 to \u20b91,30,588<\/li>\r\n<li><b><\/b><strong><b>Silver<\/b><\/strong>surged more aggressively, climbing from \u20b91,57,240 to \u20b91,70,415<\/li>\r\n<li><b><\/b><strong><b>Normalized values<\/b><\/strong>confirm silver\u2019s stronger momentum relative to gold<\/li>\r\n<li><b><\/b><strong><b>Correlation coefficient<\/b><\/strong>(based on normalized values): ~0.71, indicating a strong positive relationship<\/li>\r\n<\/ul>\r\n<h3><strong><b>Gold and Silver \u2013 Correlation, Strategy, and the Bullion Twins<\/b><\/strong><\/h3>\r\n<p><strong><b>Intraday Correlation: A Strong Link<\/b><\/strong><\/p>\r\n<p>Recent analysis using 30-minute intraday data from October 2025 reveals a correlation coefficient of 0.71 between normalized gold and silver prices. That\u2019s a strong positive relationship, especially for two separate commodities.<\/p>\r\n<p>This means that on an intraday basis, gold and silver tend to move in the same direction\u2014though not perfectly. Silver often amplifies gold\u2019s moves, making it the more volatile of the two.<\/p>\r\n<p><strong><b>What Does This Mean for Traders?<\/b><\/strong><\/p>\r\n<p>A correlation of 0.71 opens the door to pair trading strategies:<\/p>\r\n<ul>\r\n<li>Go long on gold and short on silver, or vice versa<\/li>\r\n<li>This creates a hedged position, reducing exposure to broad market risk<\/li>\r\n<li>The goal is to profit from relative movement, not absolute direction<\/li>\r\n<\/ul>\r\n<p>This is just a conceptual framework. Executing pair trades requires deeper analysis\u2014liquidity, margin, contract alignment, and divergence thresholds must be considered. We\u2019ll explore this in detail in a future module.<\/p>\r\n<p><strong><b>Visual Insight: Normalized Price Comparison<\/b><\/strong><\/p>\r\n<p>Using normalized values (starting both series at 100), the intraday chart shows:<\/p>\r\n<ul>\r\n<li>Gold and silver prices track each other closely, though silver exhibits sharper swings<\/li>\r\n<li>Visually, the correlation may not appear tight\u2014but the actual data confirms the relationship<\/li>\r\n<\/ul>\r\n<p><strong><b>End-of-Day Correlation: Even Stronger<\/b><\/strong><\/p>\r\n<p>According to a recent quarterly survey by Thomson Reuters, the EOD correlation between gold and silver averages around 0.80. This reinforces their reputation as the Bullion Twins.<\/p>\r\n<p><strong><b>Why is this important?<\/b><\/strong><\/p>\r\n<ul>\r\n<li>Both metals are viewed as safe havens during global uncertainty<\/li>\r\n<li>Events like wars, recessions, or currency shocks tend to drive parallel rallies in gold and silver<\/li>\r\n<li>Traders and investors often treat them as interchangeable hedges in crisis scenarios<\/li>\r\n<\/ul>\r\n<p><strong><b>Silver and Oil: A Volatile Relationship<\/b><\/strong><\/p>\r\n<p>Unlike gold, silver\u2019s correlation with crude oil is highly erratic. While both are industrial commodities, their price drivers differ:<\/p>\r\n<ul>\r\n<li>Oil reacts to supply shocks, OPEC decisions, and geopolitical tensions<\/li>\r\n<li>Silver responds to monetary policy, inflation, and industrial demand<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide02' class='sa_hover_container' data-hash='The-Silver-Basics' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>10.2 <\/strong><strong><b>The Silver Basics<\/b><\/strong><\/h2>\r\n<h2 style=\"text-align: left\">\u00a0<\/h2>\r\n<h3 style=\"text-align: left\"><strong><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/New-entries-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/New-entries-rafiki.svg\" \/><\/a><\/strong><\/h3>\r\n<p>&nbsp;<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, gold gets all the attention, but silver seems to be moving fast lately. What\u2019s driving that?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Silver\u2019s demand is booming, especially from industries like solar panels and electric vehicles. But supply hasn\u2019t kept up.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So there\u2019s a shortage?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Yes, and that\u2019s pushing prices higher. Let\u2019s break down the global supply-demand numbers and see what\u2019s really happening.<\/p>\r\n<p>Silver continues to be a critical industrial and investment commodity in 2025. According to the World Silver Survey, global silver demand has reached approximately 1,229 million ounces, marking a new high. The largest contributor to this demand is industrial fabrication, which accounts for around 680.5 million ounces. This growth is largely driven by expanding sectors such as solar energy, electric vehicles, and electronics manufacturing. India has also seen a notable rise in silver consumption, particularly through physical investment and jewelry demand, which surged during the festive season.<\/p>\r\n<p>On the supply side, global mine production\u00a0has increased only marginally, reaching 819.7 million ounces, a growth of just 0.9%\u00a0year-on-year. When combined with recycled silver and government sales, the total supply still falls short of meeting global demand. This has resulted in a market deficit of 148.9 million ounces, continuing a multi-year trend of supply shortfalls. While some temporary relief came from the release of stockpiles by the London Bullion Market Association (LBMA), the structural gap between supply and demand remains unresolved.<\/p>\r\n<p>Silver prices have reflected this imbalance. The average price in early 2025 was around $28.27 per ounce, the highest since 2012. By October, prices had surged to nearly $54.50 per ounce, before correcting slightly due to speculative excess and temporary oversupply. In India, silver prices doubled within five months, peaking at \u20b92 lakh per kg, driven by strong retail demand and investment interest. However, analysts have cautioned that prices may face short-term pressure due to the LBMA\u2019s intervention and seasonal supply adjustments.<\/p>\r\n<h3><strong><b>World Silver Supply and Demand \u2013 2025 (in million ounces)<\/b><\/strong><\/h3>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Category<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p><strong><b>Volume (Moz)<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Supply<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Mine Production<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>819.7<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Scrap<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>180.4<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Net Hedging Supply<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>14.3<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Net Government Sales<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>0.0<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Total Supply<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p><strong><b>1,014.4<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Demand<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Industrial Fabrication<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>680.5<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>\u2013 Electrical &amp; Electronics<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>330.2<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>\u2013 Brazing Alloys &amp; Solders<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>48.7<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>\u2013 Photography<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>27.1<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>\u2013 Other Industrial (incl. Solar)<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>274.5<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Jewelry<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>203.0<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silverware<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>40.2<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Coins &amp; Bars<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>278.3<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Physical Demand<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p><strong><b>1,201.9<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Market Balance<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Physical Surplus\/Deficit<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>-148.9<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>ETP Inventory Build<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>12.5<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Exchange Inventory Build<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>5.3<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Net Balance<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p><strong><b>-131.1<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>This data reflects a continued deficit in the silver market, driven by record-high industrial demand especially from solar and electronics and relatively stagnant mine production. Because silver demand is strong and supply often falls short, it creates good opportunities for trading silver as a commodity. But that brings up an important question, who actually decides the price of silver? Just like gold, silver prices are set in London\u00a0by a group of major banks that come together to agree on a benchmark rate. This process is known as the London Silver Fix, and it happens twice a day. These rates are used worldwide as a reference for trading, investing, and settling contracts.<\/p><\/div>\n<div id='text_slider_slide03' class='sa_hover_container' data-hash='Silver-Contracts-on-MCX' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>10.3 <\/strong><strong><b>Silver Contracts on MCX \u2013 Overview<\/b><\/strong><\/h2>\r\n<p style=\"text-align: left\">\u00a0<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, I\u2019m thinking of trading silver on MCX. Are the contracts similar to gold?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Mostly, yes. But silver has more variants\u2014like Silver Mini, Micro, and 1000\u2014with different lot sizes and margins.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0That sounds flexible. Which one should I start with?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Depends on your capital and strategy. Let me show you how each contract works so you can decide.<\/p>\r\n<p style=\"text-align: left\"><em><span style=\"color: #000080\"><strong><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Search-engines-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Search-engines-bro.svg\" \/><\/a><\/strong><\/span><\/em><\/p>\r\n<p>&nbsp;<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong> Isha, now I\u2019m thinking of trading silver on MCX. Are the contracts similar to gold?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong> Mostly, yes. But silver has more variants, like Silver Mini, Micro, and 1000, with different lot sizes and margins.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0That sounds flexible. Which one should I start with?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Depends on your capital and strategy. Let me show you how each contract works so you can decide.<\/p>\r\n<p>MCX offers four types of silver futures contracts, each designed to suit different trading volumes and margin capacities. The key difference between them lies in the lot size, which directly affects the contract value, margin requirement, and profit or loss per tick.<\/p>\r\n<p>Here\u2019s a breakdown of the available contracts:<\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Contract Type<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Price Quotation<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Lot Size<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Tick Size<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>P&amp;L per Tick<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Expiry<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Delivery Unit<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kilogram<\/p>\r\n<\/td>\r\n<td>\r\n<p>30 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b930<\/p>\r\n<\/td>\r\n<td>\r\n<p>5th day of expiry month<\/p>\r\n<\/td>\r\n<td>\r\n<p>30 kg<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Mini<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kilogram<\/p>\r\n<\/td>\r\n<td>\r\n<p>5 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b95<\/p>\r\n<\/td>\r\n<td>\r\n<p>Last day of expiry month<\/p>\r\n<\/td>\r\n<td>\r\n<p>30 kg<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Micro<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kilogram<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>Last day of expiry month<\/p>\r\n<\/td>\r\n<td>\r\n<p>30 kg<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver 1000<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kilogram<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>Last day of expiry month<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>Among these, the Silver (30 kg)\u00a0and Silver Mini (5 kg)\u00a0contracts are the most actively traded. They offer better liquidity and tighter spreads, making them popular choices for both retail and professional traders.<\/p>\r\n<p>When you view silver prices on MCX or your trading platform, the rate displayed is for 1 kilogram of silver. This quoted price already includes import duties, taxes, and other applicable charges, so it reflects the landed cost of silver in India.<\/p>\r\n<p>Let\u2019s take a closer look at how the main Silver contract works.<\/p>\r\n<p>Silver futures are quoted per kilogram, so when you see the price on your trading platform, it reflects the rate for 1 kg of silver. This quoted price includes all applicable duties, taxes, and import costs. For example, if the current price of the Silver February Futures is \u20b975,000 per kg, and the contract size is 30 kg, the total contract value would be:<\/p>\r\n<p>Contract Value = 30 \u00d7 \u20b975,000 = \u20b922,50,000<\/p>\r\n<p>To trade this contract, you need to maintain a margin, which is typically around 5% of the contract value. So, in this case, the margin requirement would be approximately \u20b91,12,500. This margin allows you to take a position without paying the full contract value upfront.<\/p>\r\n<p>Now, let\u2019s calculate the profit or loss per tick. A tick is the minimum price movement, usually \u20b91. The formula is:<\/p>\r\n<p><strong><b>P&amp;L per tick = (Lot Size \/ Quotation Unit) \u00d7 Tick Size<\/b><\/strong>\u00a0<strong><b>= (30 kg \/ 1 kg) \u00d7 \u20b91 = \u20b930<\/b><\/strong><\/p>\r\n<p>This means every \u20b91 movement in price results in a gain or loss of \u20b930 per contract.<\/p>\r\n<h3><strong><b>Contract Expiry and Liquidity<\/b><\/strong><\/h3>\r\n<p>Silver contracts on MCX typically expire on the 5th of the contract month. At any given time, multiple contracts are available for trading\u2014such as April, June, August, and November. The most liquid contract is usually the one closest to expiry. So, if you&#8217;re trading in March, the April contract would likely have the highest volume and tightest spreads.<\/p>\r\n<h3><strong><b>Settlement and Delivery<\/b><\/strong><\/h3>\r\n<p>Unlike equity derivatives, which are settled in cash, commodity futures are settled through physical delivery. If you hold a position in the Silver (30 kg) contract and choose to take delivery, you\u2019ll receive 30 kg per lot. For example, holding 5 lots means you\u2019ll be eligible for 150 kg of silver. However, to opt for delivery, you must express your intent at least four days before expiry\u2014typically between the 1st and 4th of the expiry month.<\/p>\r\n<p>It\u2019s important to note that physical delivery is mandatory\u00a0for the Silver (30 kg) contract. In contrast, Silver Mini and Silver Micro contracts offer flexibility, you can either take delivery or let them expire and settle in cash.<\/p>\r\n<h3><strong><b>Mapping to Spot Markets<\/b><\/strong><\/h3>\r\n<p>Based on the most recent data available from MCX and industry sources as of October 2025, here is the updated commodity mapping with unit and delivery location:<\/p>\r\n<h3><strong><b>Latest MCX Commodity Mapping \u2013 2025<\/b><\/strong><\/h3>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Commodity<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Unit<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Delivery Location<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>SILVER1000<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>New Delhi<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>SILVERMIC<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Ahmedabad<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>GOLDPETAL<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 gram<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>GOLDGUINEA<\/p>\r\n<\/td>\r\n<td>\r\n<p>8 grams<\/p>\r\n<\/td>\r\n<td>\r\n<p>Ahmedabad<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>GOLDM<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 grams<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>GOLD<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>COPPER<\/p>\r\n<\/td>\r\n<td>\r\n<p>2,500 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>ZINC<\/p>\r\n<\/td>\r\n<td>\r\n<p>5,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>ZINCMINI<\/p>\r\n<\/td>\r\n<td>\r\n<p>1,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>ALUMINIUM<\/p>\r\n<\/td>\r\n<td>\r\n<p>5,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>ALUMINIMINI<\/p>\r\n<\/td>\r\n<td>\r\n<p>1,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>LEAD<\/p>\r\n<\/td>\r\n<td>\r\n<p>5,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>LEADMINI<\/p>\r\n<\/td>\r\n<td>\r\n<p>1,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>NICKEL<\/p>\r\n<\/td>\r\n<td>\r\n<p>250 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>CRUDEOIL<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 barrels<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>NATURALGAS<\/p>\r\n<\/td>\r\n<td>\r\n<p>1,250 mmBtu<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>COTTON<\/p>\r\n<\/td>\r\n<td>\r\n<p>25 bales<\/p>\r\n<\/td>\r\n<td>\r\n<p>Rajkot<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>MENTHAOIL<\/p>\r\n<\/td>\r\n<td>\r\n<p>360 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Chandausi<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>CARDAMOM<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Kochi<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>SOYABEAN<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Indore<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>WHEAT<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Delhi<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>SUGARM<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Kolhapur<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<ul>\r\n<li>Every commodity traded on MCX is linked to a specific delivery location, which serves as its reference spot market. This mapping ensures that, at the time of expiry, the futures price converges with the spot price\u00a0of the designated city.\u00a0For example, the SILVER1000\u00a0contract is mapped to New Delhi, while SILVERMIC\u00a0is linked to Ahmedabad. Similarly, SOYABEAN\u00a0is mapped to Indore, and TIN\u00a0settles against the spot price in Mumbai. These locations are not arbitrary\u2014they reflect the most active physical markets or delivery centers for each commodity.<\/li>\r\n<li>Unlike equities, where both spot and futures trade on the same centralized exchange, commodities operate across multiple regional markets. To avoid discrepancies and ensure smooth settlement, MCX assigns a specific city\u00a0to each contract. Upon expiry, the futures price aligns with the prevailing spot rate in that mapped location, ensuring consistency and transparency in pricing.<\/li>\r\n<li>This mapping is especially important for traders who intend to take physical delivery, as the location determines where the commodity will be delivered. It also affects logistics, warehousing, and cost considerations for hedgers and institutional participants.<\/li>\r\n<li>\u00a0<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide04' class='sa_hover_container' data-hash='Exploring-Other-Silver-Contracts-on-MCX' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>10.4 <\/strong><b><\/b><strong><b>Exploring Other Silver Contracts on MCX<\/b><\/strong><\/h2>\r\n<h2 style=\"text-align: left\">\u00a0<\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Warning-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Warning-rafiki.svg\" \/><\/a><\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, I\u2019ve understood the main silver contract. But what about the smaller ones\u2014Mini, Micro, and 1000?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Good question. These are great for retail traders. Lower margins, smaller lot sizes, and flexible delivery options.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So I can trade silver without committing huge capital?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Exactly. Let\u2019s compare them side by side so you can pick the one that fits your style.<\/p>\r\n<p>Once you&#8217;re familiar with the main Silver (30 kg) contract, understanding the other silver variants on MCX becomes straightforward. These contracts differ primarily in lot size, which directly affects the margin requirement\u00a0and delivery options.<\/p>\r\n<p>Here\u2019s a summary of the current margin structure and settlement choices:<\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p>Contract<\/p>\r\n<\/td>\r\n<td width=\"205\">\r\n<p>Approx. Margin Required<\/p>\r\n<\/td>\r\n<td width=\"395\">\r\n<p>Margin % of Contract Value<\/p>\r\n<\/td>\r\n<td width=\"220\">\r\n<p>Delivery Option<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Mini (5 kg)<\/p>\r\n<\/td>\r\n<td width=\"205\">\r\n<p>\u20b916,850<\/p>\r\n<\/td>\r\n<td width=\"395\">\r\n<p>~6.5%<\/p>\r\n<\/td>\r\n<td width=\"220\">\r\n<p>Cash or Physical<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Micro (1 kg)<\/p>\r\n<\/td>\r\n<td width=\"205\">\r\n<p>\u20b93,420<\/p>\r\n<\/td>\r\n<td width=\"395\">\r\n<p>~5.3%<\/p>\r\n<\/td>\r\n<td width=\"220\">\r\n<p>Cash or Physical<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver 1000 (1 kg)<\/p>\r\n<\/td>\r\n<td width=\"205\">\r\n<p>\u20b93,550<\/p>\r\n<\/td>\r\n<td width=\"395\">\r\n<p>~6.2%<\/p>\r\n<\/td>\r\n<td width=\"220\">\r\n<p>Physical Only<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>As expected, the smaller lot contracts require significantly lower margins compared to the full-sized Silver contract. This makes them more accessible for retail traders who want exposure to silver without committing large capital.<\/p>\r\n<h3><strong><b>Trading Approach<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>Silver, like gold, is influenced by a wide range of global factors, industrial demand, currency movements, interest rates, and geopolitical developments. Tracking these fundamentals daily can be challenging and often unnecessary for short-term traders.<\/li>\r\n<li>Most active traders prefer using technical analysis\u00a0to identify entry and exit points. Chart patterns, volume indicators, and momentum oscillators are commonly used to trade silver futures across all contract sizes.<\/li>\r\n<li>For those inclined toward data-driven strategies, quantitative techniques\u00a0like pair trading\u00a0offer an alternative. This involves identifying price relationships between two correlated assets\u00a0such as Silver and Gold\u00a0and trading based on deviations from their historical spread. We&#8217;ll explore this strategy in detail in a separate module.<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide05' class='sa_hover_container' data-hash='Key-Takeaways' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>10.5 <\/strong><strong><b>Key Takeaways<\/b><\/strong><\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\" \/><\/a><\/p>\r\n<ul>\r\n<li>Gold and silver show strong correlation, with silver often amplifying gold\u2019s price movements.<\/li>\r\n<li>Silver is more volatile than gold, offering greater short-term trading opportunities.<\/li>\r\n<li>Pair trading strategies can be used when gold and silver prices diverge temporarily.<\/li>\r\n<li>Silver demand is driven by industrial use, especially in solar energy, electronics, and EVs.<\/li>\r\n<li>Global silver supply is lagging, creating a persistent market deficit and upward price pressure.<\/li>\r\n<li>India\u2019s silver consumption is rising, fueled by festive demand and physical investment.<\/li>\r\n<li>MCX offers four silver contracts\u2014Silver, Mini, Micro, and 1000\u2014each with different lot sizes and margins.<\/li>\r\n<li>The standard Silver contract (30 kg) requires higher margin and is settled via physical delivery.<\/li>\r\n<li>Smaller contracts like Mini and Micro are more accessible and offer cash or physical settlement options.<\/li>\r\n<li>Each silver contract is mapped to a delivery city, ensuring futures prices align with local spot markets at expiry.<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide06' class='sa_hover_container' data-hash='Fun-Activity' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>10.6 <\/strong><strong><b>Fun Activity<\/b><\/strong><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\" \/><\/a><\/h2>\r\n<p>&nbsp;<\/p>\r\n<p>You\u2019re a trader preparing to enter the silver market on MCX. Based on your capital, risk appetite, and trading goals, choose the most suitable silver contract. Then, calculate your margin and profit potential.<\/p>\r\n<p><strong><b>Scenario:<\/b><\/strong><\/p>\r\n<p>You have \u20b920,000 in trading capital and want to trade silver during the festive season. You\u2019re considering these options:<\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Contract Type<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Lot Size<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Margin Required<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>P&amp;L per \u20b91 Move<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver (30 kg)<\/p>\r\n<\/td>\r\n<td>\r\n<p>30 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91,12,500<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b930<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Mini<\/p>\r\n<\/td>\r\n<td>\r\n<p>5 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b916,850<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b95<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Micro<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b93,420<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver 1000<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b93,550<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>Questions:<\/b><\/strong><\/p>\r\n<ol>\r\n<li>Which contracts can you afford to trade with \u20b920,000?<\/li>\r\n<li>If silver moves up \u20b910 per kg, what is your profit for each contract?<\/li>\r\n<li>Which contract offers the best balance of affordability and impact for your capital?<\/li>\r\n<li>If you expect high volatility and want to limit risk, which contract would you choose and why?<\/li>\r\n<\/ol>\r\n<p><strong><b>Answer Key:<\/b><\/strong><\/p>\r\n<ol>\r\n<li><b><\/b><strong><b>You can afford:<\/b><\/strong><\/li>\r\n<\/ol>\r\n<ul>\r\n<li>Silver Mini (\u20b916,850)<\/li>\r\n<li>Silver Micro (\u20b93,420)<\/li>\r\n<li>Silver 1000 (\u20b93,550) <em><i>(Silver 30 kg is too expensive)<\/i><\/em>\r\n<ol start=\"2\">\r\n<li><b><\/b><strong><b>Profit for \u20b910 move:<\/b><\/strong><\/li>\r\n<\/ol>\r\n<\/li>\r\n<li>Silver Mini: \u20b95 \u00d7 10 = \u20b950<\/li>\r\n<li>Silver Micro: \u20b91 \u00d7 10 = \u20b910<\/li>\r\n<li>Silver 1000: \u20b91 \u00d7 10 = \u20b910\r\n<ol start=\"3\">\r\n<li>Silver Mini offers the best balance\u2014affordable within \u20b920,000 and gives meaningful exposure.<\/li>\r\n<li>For high volatility and low risk, Silver Micro is ideal\u2014small lot size, low margin, and manageable P&amp;L swings.<\/li>\r\n<\/ol>\r\n<\/li>\r\n<\/ul><\/div>\n<\/div>\n<\/div>\n<script type='text\/javascript'>\n\tjQuery(document).ready(function() {\n\t\tjQuery('#text_slider').owlCarousel({\n\t\t\titems : 1,\n\t\t\tsmartSpeed : 400,\n\t\t\tautoplay : false,\n\t\t\tautoplayHoverPause : false,\n\t\t\tsmartSpeed : 400,\n\t\t\tfluidSpeed : 400,\n\t\t\tautoplaySpeed : 400,\n\t\t\tnavSpeed : 400,\n\t\t\tdotsSpeed : 400,\n\t\t\tdotsEach : 1,\n\t\t\tloop : false,\n\t\t\tnav : true,\n\t\t\tnavText : ['Previous','Next'],\n\t\t\tdots : true,\n\t\t\tresponsiveRefreshRate : 200,\n\t\t\tslideBy : 1,\n\t\t\tmergeFit : true,\n\t\t\tautoHeight : true,\n\t\t\tmouseDrag : false,\n\t\t\ttouchDrag : true\n\t\t});\n\t\tjQuery('#text_slider').css('visibility', 'visible');\n\t\tvar owl_goto = jQuery('#text_slider');\n\t\tjQuery('.text_slider_goto1').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 0);\n\t\t});\n\t\tjQuery('.text_slider_goto2').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 1);\n\t\t});\n\t\tjQuery('.text_slider_goto3').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 2);\n\t\t});\n\t\tjQuery('.text_slider_goto4').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 3);\n\t\t});\n\t\tjQuery('.text_slider_goto5').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 4);\n\t\t});\n\t\tjQuery('.text_slider_goto6').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 5);\n\t\t});\n\t\tvar resize_75466 = jQuery('.owl-carousel');\n\t\tresize_75466.on('initialized.owl.carousel', function(e) {\n\t\t\tif (typeof(Event) === 'function') {\n\t\t\t\twindow.dispatchEvent(new Event('resize'));\n\t\t\t} else {\n\t\t\t\tvar evt = window.document.createEvent('UIEvents');\n\t\t\t\tevt.initUIEvent('resize', true, false, window, 0);\n\t\t\t\twindow.dispatchEvent(evt);\n\t\t\t}\n\t\t});\n\t});\n<\/script>\n<\/p>                    <\/div>\n\t\t        \n                    <div id=\"slides-tab\" class=\"clearfix eael-tab-content-item \" data-title-link=\"slides-tab\">\n\t\t\t\t        <p><div class='white' style='background:rgb(255, 255, 255); border:solid 0px rgb(255, 255, 255); border-radius:0px; padding:0px 0px 0px 1px;'>\n<div id='text_slider' class='owl-carousel sa_owl_theme owl-pagination-true' data-slider-id='text_slider' style='visibility: visible;visibility:visible;'>\n<div id='text_slider_slide01' class='sa_hover_container' data-hash='The\u2013Bullion\u2013Twins\u2013Gold\u2013and\u2013Silver\u2013in\u2013Sync' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>10.1 <\/strong><strong><b>The Bullion Twins \u2013 Gold and Silver in Sync?<\/b><\/strong><\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Exams-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Exams-rafiki.svg\" \/><\/a><\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, I\u00a0have noticed that when gold moves, silver often follows. Are they really that closely linked?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0That\u2019s a great observation. Gold and silver do share a strong correlation, but silver tends to be more volatile.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So traders use both together?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Exactly. Some even use pair trading strategies\u2014buying one and selling the other when their prices diverge. Let\u2019s look at how they\u2019ve behaved recently.<\/p>\r\n<p>Gold and Silver, India\u2019s most beloved precious metals are often assumed to move in tandem. This belief has given rise to strategies like pair trading, where traders exploit temporary divergences between two correlated assets. But does this assumption hold true in today\u2019s market?<\/p>\r\n<p>Let\u2019s investigate using fresh data from October 2025.<\/p>\r\n<p>&nbsp;<\/p>\r\n<p><strong><b>Latest Market Snapshot (October 21, 2025)<\/b><\/strong><\/p>\r\n<table style=\"height: 187px\" width=\"370\">\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Metal<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>MCX Futures Price<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Monthly Change<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Gold<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91,30,588 per 10 grams<\/p>\r\n<\/td>\r\n<td>\r\n<p>+\u20b98,000 (\u21916.5%)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91,70,415 per kilogram<\/p>\r\n<\/td>\r\n<td>\r\n<p>+\u20b928,270 (\u219119.8%)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<p>Both metals have surged this month, driven by:<\/p>\r\n<ul>\r\n<li>Festive demand (Dhanteras &amp; Diwali)<\/li>\r\n<li>A weakening US dollar<\/li>\r\n<li>Global safe-haven buying amid geopolitical uncertainty<\/li>\r\n<\/ul>\r\n<p><strong><b>Correlation Check: Do Gold and Silver Still Move Together?<\/b><\/strong><\/p>\r\n<p>Using 30-minute intraday data over the past 3 months (over 1,000 data points), the correlation coefficient between normalized gold and silver prices is approximately: 0.71<\/p>\r\n<p>This confirms a strong positive correlation, meaning gold and silver generally move in the same direction. However, silver continues to show greater volatility, often amplifying gold\u2019s moves.<\/p>\r\n<p><strong><b>What This Means for Traders<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Gold<\/b><\/strong>offers stability and smoother price action<\/li>\r\n<li><b><\/b><strong><b>Silver<\/b><\/strong>provides sharper swings and higher short-term trading potential<\/li>\r\n<li>Pair trading setups remain viable, especially when short-term divergence occurs.<\/li>\r\n<\/ul>\r\n<p><strong><b>Gold vs Silver \u2013 Latest Price Comparison Table (Intraday Snapshot)<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td width=\"200\">\r\n<p><strong><b>Timestamp<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"134\">\r\n<p><strong><b>Gold Close (\u20b9\/10g)<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"115\">\r\n<p><strong><b>Gold % Change<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"166\">\r\n<p><strong><b>Gold Normalized<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"146\">\r\n<p><strong><b>Silver Close (\u20b9\/kg)<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"147\">\r\n<p><strong><b>Silver % Change<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"173\">\r\n<p><strong><b>Silver Normalized<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td width=\"200\">\r\n<p>21 Oct 2025 09:30<\/p>\r\n<\/td>\r\n<td width=\"134\">\r\n<p>\u20b91,28,005<\/p>\r\n<\/td>\r\n<td width=\"115\">\r\n<p>+0.78%<\/p>\r\n<\/td>\r\n<td width=\"166\">\r\n<p>0.982<\/p>\r\n<\/td>\r\n<td width=\"146\">\r\n<p>\u20b91,57,240<\/p>\r\n<\/td>\r\n<td width=\"147\">\r\n<p>+0.41%<\/p>\r\n<\/td>\r\n<td width=\"173\">\r\n<p>0.924<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td width=\"200\">\r\n<p>As 21 Oct 2025 11:30<\/p>\r\n<\/td>\r\n<td width=\"134\">\r\n<p>\u20b91,28,556<\/p>\r\n<\/td>\r\n<td width=\"115\">\r\n<p>+0.43%<\/p>\r\n<\/td>\r\n<td width=\"166\">\r\n<p>0.985<\/p>\r\n<\/td>\r\n<td width=\"146\">\r\n<p>\u20b91,58,100<\/p>\r\n<\/td>\r\n<td width=\"147\">\r\n<p>+0.55%<\/p>\r\n<\/td>\r\n<td width=\"173\">\r\n<p>0.930<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td width=\"200\">\r\n<p>21 Oct 2025 13:30<\/p>\r\n<\/td>\r\n<td width=\"134\">\r\n<p>\u20b91,29,200<\/p>\r\n<\/td>\r\n<td width=\"115\">\r\n<p>+0.50%<\/p>\r\n<\/td>\r\n<td width=\"166\">\r\n<p>0.990<\/p>\r\n<\/td>\r\n<td width=\"146\">\r\n<p>\u20b91,59,250<\/p>\r\n<\/td>\r\n<td width=\"147\">\r\n<p>+0.73%<\/p>\r\n<\/td>\r\n<td width=\"173\">\r\n<p>0.938<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td width=\"200\">\r\n<p>21 Oct 2025 15:30<\/p>\r\n<\/td>\r\n<td width=\"134\">\r\n<p>\u20b91,30,588<\/p>\r\n<\/td>\r\n<td width=\"115\">\r\n<p>+1.07%<\/p>\r\n<\/td>\r\n<td width=\"166\">\r\n<p>1.000<\/p>\r\n<\/td>\r\n<td width=\"146\">\r\n<p>\u20b91,70,415<\/p>\r\n<\/td>\r\n<td width=\"147\">\r\n<p>+1.78%<\/p>\r\n<\/td>\r\n<td width=\"173\">\r\n<p>1.000<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>\u00a0<\/b><\/strong><\/p>\r\n<p><strong><b>\u00a0Key Observations<\/b><\/strong><\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Gold<\/b><\/strong>showed steady intraday gains, rising from \u20b91,28,005 to \u20b91,30,588<\/li>\r\n<li><b><\/b><strong><b>Silver<\/b><\/strong>surged more aggressively, climbing from \u20b91,57,240 to \u20b91,70,415<\/li>\r\n<li><b><\/b><strong><b>Normalized values<\/b><\/strong>confirm silver\u2019s stronger momentum relative to gold<\/li>\r\n<li><b><\/b><strong><b>Correlation coefficient<\/b><\/strong>(based on normalized values): ~0.71, indicating a strong positive relationship<\/li>\r\n<\/ul>\r\n<h3><strong><b>Gold and Silver \u2013 Correlation, Strategy, and the Bullion Twins<\/b><\/strong><\/h3>\r\n<p><strong><b>Intraday Correlation: A Strong Link<\/b><\/strong><\/p>\r\n<p>Recent analysis using 30-minute intraday data from October 2025 reveals a correlation coefficient of 0.71 between normalized gold and silver prices. That\u2019s a strong positive relationship, especially for two separate commodities.<\/p>\r\n<p>This means that on an intraday basis, gold and silver tend to move in the same direction\u2014though not perfectly. Silver often amplifies gold\u2019s moves, making it the more volatile of the two.<\/p>\r\n<p><strong><b>What Does This Mean for Traders?<\/b><\/strong><\/p>\r\n<p>A correlation of 0.71 opens the door to pair trading strategies:<\/p>\r\n<ul>\r\n<li>Go long on gold and short on silver, or vice versa<\/li>\r\n<li>This creates a hedged position, reducing exposure to broad market risk<\/li>\r\n<li>The goal is to profit from relative movement, not absolute direction<\/li>\r\n<\/ul>\r\n<p>This is just a conceptual framework. Executing pair trades requires deeper analysis\u2014liquidity, margin, contract alignment, and divergence thresholds must be considered. We\u2019ll explore this in detail in a future module.<\/p>\r\n<p><strong><b>Visual Insight: Normalized Price Comparison<\/b><\/strong><\/p>\r\n<p>Using normalized values (starting both series at 100), the intraday chart shows:<\/p>\r\n<ul>\r\n<li>Gold and silver prices track each other closely, though silver exhibits sharper swings<\/li>\r\n<li>Visually, the correlation may not appear tight\u2014but the actual data confirms the relationship<\/li>\r\n<\/ul>\r\n<p><strong><b>End-of-Day Correlation: Even Stronger<\/b><\/strong><\/p>\r\n<p>According to a recent quarterly survey by Thomson Reuters, the EOD correlation between gold and silver averages around 0.80. This reinforces their reputation as the Bullion Twins.<\/p>\r\n<p><strong><b>Why is this important?<\/b><\/strong><\/p>\r\n<ul>\r\n<li>Both metals are viewed as safe havens during global uncertainty<\/li>\r\n<li>Events like wars, recessions, or currency shocks tend to drive parallel rallies in gold and silver<\/li>\r\n<li>Traders and investors often treat them as interchangeable hedges in crisis scenarios<\/li>\r\n<\/ul>\r\n<p><strong><b>Silver and Oil: A Volatile Relationship<\/b><\/strong><\/p>\r\n<p>Unlike gold, silver\u2019s correlation with crude oil is highly erratic. While both are industrial commodities, their price drivers differ:<\/p>\r\n<ul>\r\n<li>Oil reacts to supply shocks, OPEC decisions, and geopolitical tensions<\/li>\r\n<li>Silver responds to monetary policy, inflation, and industrial demand<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide02' class='sa_hover_container' data-hash='The-Silver-Basics' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:400px; '><h2 style=\"text-align: left\"><strong>10.2 <\/strong><strong><b>The Silver Basics<\/b><\/strong><\/h2>\r\n<h2 style=\"text-align: left\">\u00a0<\/h2>\r\n<h3 style=\"text-align: left\"><strong><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/New-entries-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/New-entries-rafiki.svg\" \/><\/a><\/strong><\/h3>\r\n<p>&nbsp;<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, gold gets all the attention, but silver seems to be moving fast lately. What\u2019s driving that?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Silver\u2019s demand is booming, especially from industries like solar panels and electric vehicles. But supply hasn\u2019t kept up.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So there\u2019s a shortage?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Yes, and that\u2019s pushing prices higher. Let\u2019s break down the global supply-demand numbers and see what\u2019s really happening.<\/p>\r\n<p>Silver continues to be a critical industrial and investment commodity in 2025. According to the World Silver Survey, global silver demand has reached approximately 1,229 million ounces, marking a new high. The largest contributor to this demand is industrial fabrication, which accounts for around 680.5 million ounces. This growth is largely driven by expanding sectors such as solar energy, electric vehicles, and electronics manufacturing. India has also seen a notable rise in silver consumption, particularly through physical investment and jewelry demand, which surged during the festive season.<\/p>\r\n<p>On the supply side, global mine production\u00a0has increased only marginally, reaching 819.7 million ounces, a growth of just 0.9%\u00a0year-on-year. When combined with recycled silver and government sales, the total supply still falls short of meeting global demand. This has resulted in a market deficit of 148.9 million ounces, continuing a multi-year trend of supply shortfalls. While some temporary relief came from the release of stockpiles by the London Bullion Market Association (LBMA), the structural gap between supply and demand remains unresolved.<\/p>\r\n<p>Silver prices have reflected this imbalance. The average price in early 2025 was around $28.27 per ounce, the highest since 2012. By October, prices had surged to nearly $54.50 per ounce, before correcting slightly due to speculative excess and temporary oversupply. In India, silver prices doubled within five months, peaking at \u20b92 lakh per kg, driven by strong retail demand and investment interest. However, analysts have cautioned that prices may face short-term pressure due to the LBMA\u2019s intervention and seasonal supply adjustments.<\/p>\r\n<h3><strong><b>World Silver Supply and Demand \u2013 2025 (in million ounces)<\/b><\/strong><\/h3>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Category<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p><strong><b>Volume (Moz)<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Supply<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Mine Production<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>819.7<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Scrap<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>180.4<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Net Hedging Supply<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>14.3<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Net Government Sales<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>0.0<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Total Supply<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p><strong><b>1,014.4<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Demand<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Industrial Fabrication<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>680.5<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>\u2013 Electrical &amp; Electronics<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>330.2<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>\u2013 Brazing Alloys &amp; Solders<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>48.7<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>\u2013 Photography<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>27.1<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>\u2013 Other Industrial (incl. Solar)<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>274.5<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Jewelry<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>203.0<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silverware<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>40.2<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Coins &amp; Bars<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>278.3<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Physical Demand<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p><strong><b>1,201.9<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Market Balance<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>&nbsp;<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Physical Surplus\/Deficit<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>-148.9<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>ETP Inventory Build<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>12.5<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Exchange Inventory Build<\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p>5.3<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Net Balance<\/b><\/strong><\/p>\r\n<\/td>\r\n<td width=\"568\">\r\n<p><strong><b>-131.1<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>This data reflects a continued deficit in the silver market, driven by record-high industrial demand especially from solar and electronics and relatively stagnant mine production. Because silver demand is strong and supply often falls short, it creates good opportunities for trading silver as a commodity. But that brings up an important question, who actually decides the price of silver? Just like gold, silver prices are set in London\u00a0by a group of major banks that come together to agree on a benchmark rate. This process is known as the London Silver Fix, and it happens twice a day. These rates are used worldwide as a reference for trading, investing, and settling contracts.<\/p><\/div>\n<div id='text_slider_slide03' class='sa_hover_container' data-hash='Silver-Contracts-on-MCX' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>10.3 <\/strong><strong><b>Silver Contracts on MCX \u2013 Overview<\/b><\/strong><\/h2>\r\n<p style=\"text-align: left\">\u00a0<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, I\u2019m thinking of trading silver on MCX. Are the contracts similar to gold?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Mostly, yes. But silver has more variants\u2014like Silver Mini, Micro, and 1000\u2014with different lot sizes and margins.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0That sounds flexible. Which one should I start with?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Depends on your capital and strategy. Let me show you how each contract works so you can decide.<\/p>\r\n<p style=\"text-align: left\"><em><span style=\"color: #000080\"><strong><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Search-engines-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Search-engines-bro.svg\" \/><\/a><\/strong><\/span><\/em><\/p>\r\n<p>&nbsp;<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong> Isha, now I\u2019m thinking of trading silver on MCX. Are the contracts similar to gold?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong> Mostly, yes. But silver has more variants, like Silver Mini, Micro, and 1000, with different lot sizes and margins.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0That sounds flexible. Which one should I start with?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Depends on your capital and strategy. Let me show you how each contract works so you can decide.<\/p>\r\n<p>MCX offers four types of silver futures contracts, each designed to suit different trading volumes and margin capacities. The key difference between them lies in the lot size, which directly affects the contract value, margin requirement, and profit or loss per tick.<\/p>\r\n<p>Here\u2019s a breakdown of the available contracts:<\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Contract Type<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Price Quotation<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Lot Size<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Tick Size<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>P&amp;L per Tick<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Expiry<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Delivery Unit<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kilogram<\/p>\r\n<\/td>\r\n<td>\r\n<p>30 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b930<\/p>\r\n<\/td>\r\n<td>\r\n<p>5th day of expiry month<\/p>\r\n<\/td>\r\n<td>\r\n<p>30 kg<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Mini<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kilogram<\/p>\r\n<\/td>\r\n<td>\r\n<p>5 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b95<\/p>\r\n<\/td>\r\n<td>\r\n<p>Last day of expiry month<\/p>\r\n<\/td>\r\n<td>\r\n<p>30 kg<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Micro<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kilogram<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>Last day of expiry month<\/p>\r\n<\/td>\r\n<td>\r\n<p>30 kg<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver 1000<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kilogram<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<td>\r\n<p>Last day of expiry month<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>Among these, the Silver (30 kg)\u00a0and Silver Mini (5 kg)\u00a0contracts are the most actively traded. They offer better liquidity and tighter spreads, making them popular choices for both retail and professional traders.<\/p>\r\n<p>When you view silver prices on MCX or your trading platform, the rate displayed is for 1 kilogram of silver. This quoted price already includes import duties, taxes, and other applicable charges, so it reflects the landed cost of silver in India.<\/p>\r\n<p>Let\u2019s take a closer look at how the main Silver contract works.<\/p>\r\n<p>Silver futures are quoted per kilogram, so when you see the price on your trading platform, it reflects the rate for 1 kg of silver. This quoted price includes all applicable duties, taxes, and import costs. For example, if the current price of the Silver February Futures is \u20b975,000 per kg, and the contract size is 30 kg, the total contract value would be:<\/p>\r\n<p>Contract Value = 30 \u00d7 \u20b975,000 = \u20b922,50,000<\/p>\r\n<p>To trade this contract, you need to maintain a margin, which is typically around 5% of the contract value. So, in this case, the margin requirement would be approximately \u20b91,12,500. This margin allows you to take a position without paying the full contract value upfront.<\/p>\r\n<p>Now, let\u2019s calculate the profit or loss per tick. A tick is the minimum price movement, usually \u20b91. The formula is:<\/p>\r\n<p><strong><b>P&amp;L per tick = (Lot Size \/ Quotation Unit) \u00d7 Tick Size<\/b><\/strong>\u00a0<strong><b>= (30 kg \/ 1 kg) \u00d7 \u20b91 = \u20b930<\/b><\/strong><\/p>\r\n<p>This means every \u20b91 movement in price results in a gain or loss of \u20b930 per contract.<\/p>\r\n<h3><strong><b>Contract Expiry and Liquidity<\/b><\/strong><\/h3>\r\n<p>Silver contracts on MCX typically expire on the 5th of the contract month. At any given time, multiple contracts are available for trading\u2014such as April, June, August, and November. The most liquid contract is usually the one closest to expiry. So, if you&#8217;re trading in March, the April contract would likely have the highest volume and tightest spreads.<\/p>\r\n<h3><strong><b>Settlement and Delivery<\/b><\/strong><\/h3>\r\n<p>Unlike equity derivatives, which are settled in cash, commodity futures are settled through physical delivery. If you hold a position in the Silver (30 kg) contract and choose to take delivery, you\u2019ll receive 30 kg per lot. For example, holding 5 lots means you\u2019ll be eligible for 150 kg of silver. However, to opt for delivery, you must express your intent at least four days before expiry\u2014typically between the 1st and 4th of the expiry month.<\/p>\r\n<p>It\u2019s important to note that physical delivery is mandatory\u00a0for the Silver (30 kg) contract. In contrast, Silver Mini and Silver Micro contracts offer flexibility, you can either take delivery or let them expire and settle in cash.<\/p>\r\n<h3><strong><b>Mapping to Spot Markets<\/b><\/strong><\/h3>\r\n<p>Based on the most recent data available from MCX and industry sources as of October 2025, here is the updated commodity mapping with unit and delivery location:<\/p>\r\n<h3><strong><b>Latest MCX Commodity Mapping \u2013 2025<\/b><\/strong><\/h3>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Commodity<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Unit<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Delivery Location<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>SILVER1000<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>New Delhi<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>SILVERMIC<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Ahmedabad<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>GOLDPETAL<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 gram<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>GOLDGUINEA<\/p>\r\n<\/td>\r\n<td>\r\n<p>8 grams<\/p>\r\n<\/td>\r\n<td>\r\n<p>Ahmedabad<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>GOLDM<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 grams<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>GOLD<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>COPPER<\/p>\r\n<\/td>\r\n<td>\r\n<p>2,500 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>ZINC<\/p>\r\n<\/td>\r\n<td>\r\n<p>5,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>ZINCMINI<\/p>\r\n<\/td>\r\n<td>\r\n<p>1,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>ALUMINIUM<\/p>\r\n<\/td>\r\n<td>\r\n<p>5,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>ALUMINIMINI<\/p>\r\n<\/td>\r\n<td>\r\n<p>1,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>LEAD<\/p>\r\n<\/td>\r\n<td>\r\n<p>5,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>LEADMINI<\/p>\r\n<\/td>\r\n<td>\r\n<p>1,000 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>NICKEL<\/p>\r\n<\/td>\r\n<td>\r\n<p>250 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>CRUDEOIL<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 barrels<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>NATURALGAS<\/p>\r\n<\/td>\r\n<td>\r\n<p>1,250 mmBtu<\/p>\r\n<\/td>\r\n<td>\r\n<p>Mumbai<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>COTTON<\/p>\r\n<\/td>\r\n<td>\r\n<p>25 bales<\/p>\r\n<\/td>\r\n<td>\r\n<p>Rajkot<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>MENTHAOIL<\/p>\r\n<\/td>\r\n<td>\r\n<p>360 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Chandausi<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>CARDAMOM<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Kochi<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>SOYABEAN<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Indore<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>WHEAT<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Delhi<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>SUGARM<\/p>\r\n<\/td>\r\n<td>\r\n<p>100 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>Kolhapur<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<ul>\r\n<li>Every commodity traded on MCX is linked to a specific delivery location, which serves as its reference spot market. This mapping ensures that, at the time of expiry, the futures price converges with the spot price\u00a0of the designated city.\u00a0For example, the SILVER1000\u00a0contract is mapped to New Delhi, while SILVERMIC\u00a0is linked to Ahmedabad. Similarly, SOYABEAN\u00a0is mapped to Indore, and TIN\u00a0settles against the spot price in Mumbai. These locations are not arbitrary\u2014they reflect the most active physical markets or delivery centers for each commodity.<\/li>\r\n<li>Unlike equities, where both spot and futures trade on the same centralized exchange, commodities operate across multiple regional markets. To avoid discrepancies and ensure smooth settlement, MCX assigns a specific city\u00a0to each contract. Upon expiry, the futures price aligns with the prevailing spot rate in that mapped location, ensuring consistency and transparency in pricing.<\/li>\r\n<li>This mapping is especially important for traders who intend to take physical delivery, as the location determines where the commodity will be delivered. It also affects logistics, warehousing, and cost considerations for hedgers and institutional participants.<\/li>\r\n<li>\u00a0<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide04' class='sa_hover_container' data-hash='Exploring-Other-Silver-Contracts-on-MCX' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>10.4 <\/strong><b><\/b><strong><b>Exploring Other Silver Contracts on MCX<\/b><\/strong><\/h2>\r\n<h2 style=\"text-align: left\">\u00a0<\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Warning-rafiki.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Warning-rafiki.svg\" \/><\/a><\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0Isha, I\u2019ve understood the main silver contract. But what about the smaller ones\u2014Mini, Micro, and 1000?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Good question. These are great for retail traders. Lower margins, smaller lot sizes, and flexible delivery options.<\/p>\r\n<p><strong><b>Varun:<\/b><\/strong>\u00a0So I can trade silver without committing huge capital?<\/p>\r\n<p><strong><b>Isha:<\/b><\/strong>\u00a0Exactly. Let\u2019s compare them side by side so you can pick the one that fits your style.<\/p>\r\n<p>Once you&#8217;re familiar with the main Silver (30 kg) contract, understanding the other silver variants on MCX becomes straightforward. These contracts differ primarily in lot size, which directly affects the margin requirement\u00a0and delivery options.<\/p>\r\n<p>Here\u2019s a summary of the current margin structure and settlement choices:<\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p>Contract<\/p>\r\n<\/td>\r\n<td width=\"205\">\r\n<p>Approx. Margin Required<\/p>\r\n<\/td>\r\n<td width=\"395\">\r\n<p>Margin % of Contract Value<\/p>\r\n<\/td>\r\n<td width=\"220\">\r\n<p>Delivery Option<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Mini (5 kg)<\/p>\r\n<\/td>\r\n<td width=\"205\">\r\n<p>\u20b916,850<\/p>\r\n<\/td>\r\n<td width=\"395\">\r\n<p>~6.5%<\/p>\r\n<\/td>\r\n<td width=\"220\">\r\n<p>Cash or Physical<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Micro (1 kg)<\/p>\r\n<\/td>\r\n<td width=\"205\">\r\n<p>\u20b93,420<\/p>\r\n<\/td>\r\n<td width=\"395\">\r\n<p>~5.3%<\/p>\r\n<\/td>\r\n<td width=\"220\">\r\n<p>Cash or Physical<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver 1000 (1 kg)<\/p>\r\n<\/td>\r\n<td width=\"205\">\r\n<p>\u20b93,550<\/p>\r\n<\/td>\r\n<td width=\"395\">\r\n<p>~6.2%<\/p>\r\n<\/td>\r\n<td width=\"220\">\r\n<p>Physical Only<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>As expected, the smaller lot contracts require significantly lower margins compared to the full-sized Silver contract. This makes them more accessible for retail traders who want exposure to silver without committing large capital.<\/p>\r\n<h3><strong><b>Trading Approach<\/b><\/strong><\/h3>\r\n<ul>\r\n<li>Silver, like gold, is influenced by a wide range of global factors, industrial demand, currency movements, interest rates, and geopolitical developments. Tracking these fundamentals daily can be challenging and often unnecessary for short-term traders.<\/li>\r\n<li>Most active traders prefer using technical analysis\u00a0to identify entry and exit points. Chart patterns, volume indicators, and momentum oscillators are commonly used to trade silver futures across all contract sizes.<\/li>\r\n<li>For those inclined toward data-driven strategies, quantitative techniques\u00a0like pair trading\u00a0offer an alternative. This involves identifying price relationships between two correlated assets\u00a0such as Silver and Gold\u00a0and trading based on deviations from their historical spread. We&#8217;ll explore this strategy in detail in a separate module.<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide05' class='sa_hover_container' data-hash='Key-Takeaways' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>10.5 <\/strong><strong><b>Key Takeaways<\/b><\/strong><\/h2>\r\n<p><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\" \/><\/a><\/p>\r\n<ul>\r\n<li>Gold and silver show strong correlation, with silver often amplifying gold\u2019s price movements.<\/li>\r\n<li>Silver is more volatile than gold, offering greater short-term trading opportunities.<\/li>\r\n<li>Pair trading strategies can be used when gold and silver prices diverge temporarily.<\/li>\r\n<li>Silver demand is driven by industrial use, especially in solar energy, electronics, and EVs.<\/li>\r\n<li>Global silver supply is lagging, creating a persistent market deficit and upward price pressure.<\/li>\r\n<li>India\u2019s silver consumption is rising, fueled by festive demand and physical investment.<\/li>\r\n<li>MCX offers four silver contracts\u2014Silver, Mini, Micro, and 1000\u2014each with different lot sizes and margins.<\/li>\r\n<li>The standard Silver contract (30 kg) requires higher margin and is settled via physical delivery.<\/li>\r\n<li>Smaller contracts like Mini and Micro are more accessible and offer cash or physical settlement options.<\/li>\r\n<li>Each silver contract is mapped to a delivery city, ensuring futures prices align with local spot markets at expiry.<\/li>\r\n<\/ul><\/div>\n<div id='text_slider_slide06' class='sa_hover_container' data-hash='Fun-Activity' style='padding:4.9% 5%; margin:0px 0%; min-height:400px; '><h2 style=\"text-align: left\"><strong>10.6 <\/strong><strong><b>Fun Activity<\/b><\/strong><a href=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\"><img decoding=\"async\" class=\"style-svg aligncenter\" src=\"http:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/11\/Questions-bro.svg\" \/><\/a><\/h2>\r\n<p>&nbsp;<\/p>\r\n<p>You\u2019re a trader preparing to enter the silver market on MCX. Based on your capital, risk appetite, and trading goals, choose the most suitable silver contract. Then, calculate your margin and profit potential.<\/p>\r\n<p><strong><b>Scenario:<\/b><\/strong><\/p>\r\n<p>You have \u20b920,000 in trading capital and want to trade silver during the festive season. You\u2019re considering these options:<\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Contract Type<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Lot Size<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Margin Required<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>P&amp;L per \u20b91 Move<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver (30 kg)<\/p>\r\n<\/td>\r\n<td>\r\n<p>30 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91,12,500<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b930<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Mini<\/p>\r\n<\/td>\r\n<td>\r\n<p>5 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b916,850<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b95<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver Micro<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b93,420<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p>Silver 1000<\/p>\r\n<\/td>\r\n<td>\r\n<p>1 kg<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b93,550<\/p>\r\n<\/td>\r\n<td>\r\n<p>\u20b91<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>Questions:<\/b><\/strong><\/p>\r\n<ol>\r\n<li>Which contracts can you afford to trade with \u20b920,000?<\/li>\r\n<li>If silver moves up \u20b910 per kg, what is your profit for each contract?<\/li>\r\n<li>Which contract offers the best balance of affordability and impact for your capital?<\/li>\r\n<li>If you expect high volatility and want to limit risk, which contract would you choose and why?<\/li>\r\n<\/ol>\r\n<p><strong><b>Answer Key:<\/b><\/strong><\/p>\r\n<ol>\r\n<li><b><\/b><strong><b>You can afford:<\/b><\/strong><\/li>\r\n<\/ol>\r\n<ul>\r\n<li>Silver Mini (\u20b916,850)<\/li>\r\n<li>Silver Micro (\u20b93,420)<\/li>\r\n<li>Silver 1000 (\u20b93,550) <em><i>(Silver 30 kg is too expensive)<\/i><\/em>\r\n<ol start=\"2\">\r\n<li><b><\/b><strong><b>Profit for \u20b910 move:<\/b><\/strong><\/li>\r\n<\/ol>\r\n<\/li>\r\n<li>Silver Mini: \u20b95 \u00d7 10 = \u20b950<\/li>\r\n<li>Silver Micro: \u20b91 \u00d7 10 = \u20b910<\/li>\r\n<li>Silver 1000: \u20b91 \u00d7 10 = \u20b910\r\n<ol start=\"3\">\r\n<li>Silver Mini offers the best balance\u2014affordable within \u20b920,000 and gives meaningful exposure.<\/li>\r\n<li>For high volatility and low risk, Silver Micro is ideal\u2014small lot size, low margin, and manageable P&amp;L swings.<\/li>\r\n<\/ol>\r\n<\/li>\r\n<\/ul><\/div>\n<\/div>\n<\/div>\n<script type='text\/javascript'>\n\tjQuery(document).ready(function() {\n\t\tjQuery('#text_slider').owlCarousel({\n\t\t\titems : 1,\n\t\t\tsmartSpeed : 400,\n\t\t\tautoplay : false,\n\t\t\tautoplayHoverPause : false,\n\t\t\tsmartSpeed : 400,\n\t\t\tfluidSpeed : 400,\n\t\t\tautoplaySpeed : 400,\n\t\t\tnavSpeed : 400,\n\t\t\tdotsSpeed : 400,\n\t\t\tdotsEach : 1,\n\t\t\tloop : false,\n\t\t\tnav : true,\n\t\t\tnavText : ['Previous','Next'],\n\t\t\tdots : true,\n\t\t\tresponsiveRefreshRate : 200,\n\t\t\tslideBy : 1,\n\t\t\tmergeFit : true,\n\t\t\tautoHeight : true,\n\t\t\tmouseDrag : false,\n\t\t\ttouchDrag : true\n\t\t});\n\t\tjQuery('#text_slider').css('visibility', 'visible');\n\t\tvar owl_goto = jQuery('#text_slider');\n\t\tjQuery('.text_slider_goto1').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 0);\n\t\t});\n\t\tjQuery('.text_slider_goto2').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 1);\n\t\t});\n\t\tjQuery('.text_slider_goto3').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 2);\n\t\t});\n\t\tjQuery('.text_slider_goto4').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 3);\n\t\t});\n\t\tjQuery('.text_slider_goto5').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 4);\n\t\t});\n\t\tjQuery('.text_slider_goto6').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 5);\n\t\t});\n\t\tvar resize_75466 = jQuery('.owl-carousel');\n\t\tresize_75466.on('initialized.owl.carousel', function(e) {\n\t\t\tif (typeof(Event) === 'function') {\n\t\t\t\twindow.dispatchEvent(new Event('resize'));\n\t\t\t} else {\n\t\t\t\tvar evt = window.document.createEvent('UIEvents');\n\t\t\t\tevt.initUIEvent('resize', true, false, window, 0);\n\t\t\t\twindow.dispatchEvent(evt);\n\t\t\t}\n\t\t});\n\t});\n<\/script>\n<\/p>                    <\/div>\n\t\t        \n                    <div id=\"videos-tab\" class=\"clearfix eael-tab-content-item \" data-title-link=\"videos-tab\">\n\t\t\t\t                            <\/div>\n\t\t                    <\/div>\n        <\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Study Slides Videos 9.1 The Bullion Twins \u2013 Gold and Silver in Sync? Varun:\u00a0Isha, I\u00a0have noticed that when gold moves, silver often follows. Are they really that closely linked? Isha:\u00a0That\u2019s a great observation. Gold and silver do share a strong correlation, but silver tends to be more volatile. Varun:\u00a0So traders use both together? Isha:\u00a0Exactly. Some &#8230; <a title=\"Silver\" class=\"read-more\" href=\"https:\/\/www.5paisa.com\/finschool\/course\/currency-commodity-government-securities-course\/silver\/\" aria-label=\"Read more about Silver\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":13805,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"class_list":["post-75492","markets","type-markets","status-publish","format-standard","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/75492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets"}],"about":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/types\/markets"}],"author":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/comments?post=75492"}],"version-history":[{"count":4,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/75492\/revisions"}],"predecessor-version":[{"id":75496,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/75492\/revisions\/75496"}],"up":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/13805"}],"wp:attachment":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/media?parent=75492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/categories?post=75492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}