Products containing silver could be found anywhere, but do you know that you could also participate in trading silver, the raw material, in the marketplace? Instead of just using it as silverware for dinner, you could also instead opt to take the opportunity of profiting on trading silver in the market.
Oftentimes, commodities are raw materials that could be bought and sold in the marketplace. These raw materials are then processed to create further end-products, like the aforementioned silverware. These commodities are being traded globally in different time zones; hence the market prices would tend to fluctuate constantly as they reflect the aggregation of the decisions of the traders.
Silver is a precious metal that is used in jewelry, electronics, silverware, and currencies. Silver trading has existed for thousands of years, and it still remains to be one of those which engage wide participation. Due to its popularity with market participants, this creates enough volatility and liquidity to have profit opportunities.
Those who trade silver could participate in the fluctuating price action by buying and selling either spot contracts or futures. Spot contracts indicate that the contract’s price is silver’s current market price. Whereas, futures indicate that the contract’s price is reflective of the one wherein the buyers are willing to pay for that silver contract which has a future delivery date. Keep note that the futures contract’s price is definitely not guaranteed that silver will be able to reach that particular price once the pre-determined date has arrived. Futures trading are usually being used as hedges (risk-management tool), or as means to speculate.
CFDs (contracts for differences) are varieties of derivatives. What are derivatives you may ask? They are also financial instruments, but whose prices are derived from the prices of the underlying assets (in this case, silver). A CFD transaction involves the settlement in cash of the differences between the opening and the closing prices of a contract. It is an agreement to exchange the difference in valuation between the price of the contract when it was initially opened and the price of the contract after it was closed. Unlike in stock trading and commodities trading, there is no transfer of anything that’s happening here (in the case of the former – no transfer of shares, and in the latter’s case – no transfer of physical goods). Hence, that makes this process relatively more efficient (time and cost).
These CFDs are also advantageous for silver traders for they can have profit opportunities regardless of the market’s general direction, as trading CFDs enable participants to go long (buy and be able to sell at a higher price for a profit), or maybe go short (sell at a high price and be able to buy back what they previously sold at a lower price for a profit). Furthermore, these CFDs allow silver traders to be diversified; hence the risk is more managed.
What’s the real story?
That introduction surely caught your attention, didn’t it? Now that you’re interested in exploring the trading opportunities in silver CFDs, then you definitely have to go and create and create an account with the broker eToro right away (https://www.etoro.com).
What is eToro?
eToro is one of the industry leaders in CFD and currency trading. They were also the ones to first introduce the concept of social trading, and it currently has the world’s leading social trading network. For a little more than a decade of its existence, eToro has been an industry leader in the global FinTech revolution. When they started back in 2007, they had an objective of disrupting the then market by making trading more accessible to anyone and anywhere.
This firm is a fully-regulated broker in the different areas in the globe that it services. It adheres to the rules set by the regulatory bodies such as CySec, FCA, and ASIC is a testament that it has your best interests in mind. This is further embodied in the way that it values security and integrity by continuously keeping up with the highest standards of cybersecurity, and having your funds safely secured in tier 1 European banks.
Are you interested to hear more about this amazing broker? We will discuss the features that the platform provides.
Even if it is the first time that you will check out its platform, it is fairly evident that eToro’s platform is organized and simple enough to maneuver around. The whole end-to-end procedure of creating an account, depositing money to fund your account, executing trades, and then withdrawing money is pretty straightforward. When signing-up, you have the choice of not only registering via your email account, but also are given the choice of just logging in via your Facebook or Google account. Talk about ease, right? The website’s layout is an example of simplicity and thoroughness, as the different financial instruments available in their platform are already listed in the main window. The default list that shows up is your watchlist – the advantage of having this is that it narrows down the assets that you need to focus your analysis on. And being focused is a necessity to succeed in this game of financial markets. Additional asset names could be added to your watchlist, or you could create a new watchlist altogether (for organization purposes). If you would like to add silver on your watchlist, you could either use the search bar (located at the top center), or you could scroll down to the bottom of the watchlist, and click the “add markets” icon. Look for the category where the instrument belongs to (i.e. silver could be found under commodities), then just add that instrument. The platform has lots of instruments to choose from, each category having different characteristics such as volatility or current trend. The different categories include: currencies, ETFs, stocks, indices, commodities, and the newest group – cryptocurrencies.
Pros and Cons
Social trading is a feature that was established by the eToro platform. It combines the advantages brought about by traditional brokers and those by social media platforms. Once inside the platform, you could search for the top performers – look at the numbers, and decide if their style fits you – then you simply copy their trades. You would get the knowledge and perhaps profit from the performance of your peers, and those whose trades are being copied – would be in turn, incentivized.
The firm also offers market competitive bid-ask spreads. Hence, you would not be drastically affected by slippages if ever the market runs into extreme volatility and lack of liquidity, which happens somewhat often. Moreover, you would be delighted by the alerts feature that is offered by the platform. You will find this to be advantageous as you will know that your current trades are nearing certain price thresholds without the need for you to actively monitor the price action.
The eToro platform also has risk management tools such as take profit and stop loss. The former would ensure that you could monetize your gains along the way, and the latter would help you limit your losses if ever the trade idea proved to be wrong.
For technical analysts, charts are probably the main tool that they are using. And detailed charts are not displayed on the main page of the platform. You will have to click the small line chart next to the asset’s name or would need to click the gear icon which is located on the upper right area, then click “Launch ProCharts”.
This additional action might prove to be a slight disadvantage for those who want their price action information firsthand.
Lastly, the eToro platform has an education feature to help you (especially if you are just starting out) analyze and execute your trading ideas better. This would also definitely help you in managing the risk that is inherent in the marketplace. Such items include the economic calendar (for macroeconomic events), the daily market updates, Fintech basics and concepts, and social trading introduction.
How to trade gold CFDs using eToro
These features offered by the eToro platform are a big help to you when trading silver CFDs. You could just simply click silver then click trade. You then will be sent to a page wherein you would input data such as:
1. Choose the transaction: either buy or sell.
2. Choose the kind of order: market rate or limit order.
3. Input the amount of your bet.
4. Input how much leverage you prefer (1x,2x,5x).
5. Input your stop loss order.
6. Input your take profit order.
Interested to Trade Silver?
The best part?
You definitely can participate now in one of the most actively traded markets in the world. Create an account with eToro and readily trade silver using the platform’s easy-to-use but definitely helpful features. And definitely try out and take advantage of eToro’s social trading innovation, as they were the ones who pioneered that feature. Happy trading!
Kindly always remember to manage risk at all times.
66% of retail CFD accounts lose money