Products made of silver are pretty common sights in our everyday life.
You might be very familiar with silver in terms of you having bought silverware and used them afterwards.
Do you also know that you not only could be the ones to always buy silver products or even silver, the commodity itself – but you could also profit by trading that commodity in the financial markets?
That made you think, didn’t it?
Make sure to read the rest of the article to know how you would be able to participate in trading silver!
Commodities are usually raw materials that are being bought and sold in markets located in different parts of the world.
These aforementioned materials are then processed further to create more goods which then are sold to consumers (i.e. silver would be processed to create silverware).
Since market participants are all over the world, this creates continuous movements in the supply-demand dynamics which then manifest in price fluctuations.
Not convinced yet? See this graph below and notice the fluctuations in the value of silver for the past several years:
Silver is a metal which is used to create end products like jewelry, currencies, electronics, and silverware.
Trading this precious metal has existed throughout history, and it still rings true today.
This widespread participation creates the needed liquidity and volatility in order for silver traders to take advantage of these profit opportunities.
Market participants could buy and sell spot or futures contracts.
To take care of that confusion, spot contracts are contracts whose prices reflect the current market price of silver.
Whereas, a futures contract is a contract whose price is the price that buyers are willing to pay for, with a delivery date that is set sometime in the future.
That does not however mean that the market price of silver will somehow be able to match that contract’s price once the agreed upon date has arrived.
These types of contracts are used to either for risk management purposes (hedging), or for speculation purposes (to make bets on what future trend of the price of silver).
Contracts for differences – or CFDs – are examples of financial instruments called derivatives. Like any other financial instrument, derivatives are tradable, but their prices are dependent upon their underlying assets’ prices (as in this case, silver). A CFD contract entails a cash settlement of the difference between the opening and closing prices of the contract. It is an agreement that an exchange would occur concerning the difference between the contract’s price when it was opened and its subsequent price once it was finally closed.
Should you choose to trade CFDs, you would also have a distinct advantage over those trading other instruments in terms of efficiency in time and cost. Reason being is that there’s no transfer of anything that is happening; unlike in stock trading where there is a transfer of shares that is involved, or in the case of commodities trading, where there are some cases that there is a physical transfer of goods which occurs.
Furthermore, silver traders also find CFDs advantageous because CFDs offer them profit opportunities notwithstanding the general trend of the market. Traders could go long (buy at lower prices in order to sell at higher prices for a profit), or they could also go short (sell when the prices are higher in order to be able to buy them back at lower prices for a profit). CFDs also provide them a venue to diversify and/or hedge, enabling them to manage their risk.
What’s the real story?
We’re pretty sure the opportunities to profit have caught your interest the fact that you’re still reading this part.
Without wasting another moment your precious time, kindly proceed to create an account with InvestMarkets right now by going to www.investmarkets.com so you would also be able to explore its platform
If you’d like to know more about this broker, you may check out our full review before trading on one of their platforms.
What is InvestMarkets?
InvestMarkets is an industry leader in the business of CFD trading.
It is well-recognized by in the brokerage industry for quite some time now.
InvestMarkets started out as a broker for binary options products back in 2010, and has since broadened the products and services that they offer. Their competitive advantage over other brokers is in its continuous innovation to provide you a great product that is tailor-fit to your trading needs.
Because it values integrity and has your best interests in mind, the company is regulated by the International Financial Services Commission of Belize with a license number of 000307/19. It follows the stringent rules set by the regulating body in order to ensure quality and fairness in all its processes.
Next up is that we shall be stating the platform’s features in greater detail.
Are you ready?
The InvestMarkets platform contains a substantial amount of diverse information (different asset classes), but presented in a layout whose design is simple to understand, and extremely user-friendly.
The amount of data is favourable for your analysis, but the simplicity of the design will not burden you with unnecessary and trivial matters – allowing you to focus on the important things – like your trade execution.
The end-to-end process of creating an account to the depositing of money, and the eventual withdrawal of funds is pretty direct and straightforward.
The platform was designed for you to have most of the links presented in the main layout page.
However, unlike other brokers, InvestMarkets does not have the option for you to create an account (or log in) using your Facebook or Google account.
In terms of convenience, this might cause a slight inconvenience, however if you look at it from a security perspective, it is actually a nice feature. With this, you are assured that your log-in credentials are not shared with other applications. In terms of security and data privacy, this is a win.
The over-all design of the platform could be seen as minimalist.
- Most of your account information-related links could be found on the top menu (like: verification center, account details, and even the change password option).
- The list of assets that are available to be traded using the platform is located on the left pane. You may search for a specific financial instrument by typing its name on the search field, or look for it under the asset class where it is classified under (i.e. silver is under commodity).
- The main feature, which is the trading execution area, could be found on the right pane. Rightfully so, it is allocated the largest portion of the screen. After you have selected the asset that you would like to trade (i.e. silver), the trading portion of the screen will then show the necessary details pertaining to that chosen asset.
Pros and Cons
- Minimalist and easy-to-navigate platform
- Education center covering a wide array of topics
- Can easily access silver instrument on platform
- Low floating bid-ask spreads
- Risk-management tools
- Price charts not on platform main page
- Restrictions on a few countries
Let’s first talk about the pros:
An advantage that InvestMarkets could provide you, over other counterparts, is that they put an emphasis on education. They offer various materials to assist you on making educated trading decisions. And these materials are presented in various ways, which is definitely a welcome sight.
- Technical analysis – the analysis of past price movements in order to look for patterns that indicate what will likely be the next move that will occur. The premise is that most – if not all – information is already factored in the price. And also that the behavior of market participants will not change. What happened before could likely happen again.
- Fundamental analysis – the analysis of macro-economic data in order to have a gauge what will the balance of supply and demand theoretically be like on a macro level, given the information (i.e. macro-economic data, announcements, news or events).
- Trading psychology – Prices are human constructs. And trading psychology could likely explain your and your fellow market participants’ behavior.
- Videos – Educational materials are presented on a video format. It has an advantage over text-based materials because you are more likely to learn from them.
- Scheduled webinars – They value your business and your time. Hence, they also allocate their time by providing scheduled webinars to further your education.
- Interactive eBook
InvestMarkets also offers one of the lowest floating bid-ask spreads in the field. This is particularly advantageous during bouts of low liquidity and high volatility. With that feature, you will not be much affected by slippages if those aforementioned events occur.
Finally, this broker also offers you a couple of tools for risk-management purposes: Stop-loss orders and take-profit orders. Stop-loss orders are designed to cut your losses short if ever the trading idea goes against you. Take-profit orders are then designed to monetize the profits of your open trade, once you’re already up a certain percentage.
Now let’s talk about the cons:
On the platform, the price charts are not shown by default. You need to click another link in order for the charts to show up. If you’re a technical analyst, charts provide you real-time price information; hence this might cause a bit of delay.
Also, InvestMarkets does not have price alerts.
The educational material videos which were discussed earlier could be found on their site.
There are also text-based tutorials on topics ranging from technical analysis, fundamental analysis, trading psychology, etc.
How to trade silver CFDs using InvestMarkets
InvestMarkets has all the necessary data housed in a simplistic design. Please always do your analysis before executing your silver trades. Select silver from the list found on the left pane. And then on the main pane, complete the rest of the data:
- Volume (in lots) of your preferred order. The point value is also shown.
- If a market order is preferred, click the buy or sell icon.
- If a limit order is preferred, click the “Open trade when rate reach” checkbox. Then place the value that, if triggered, will open your trade. Then click the buy or sell icon.
- Put in your stop loss order.
- Put in your take profit order.
Interested to Trade Silver?
We can’t emphasize enough:
That InvestMarkets is an industry leader as shown by the very good product that it offers you.
So, what are you waiting for?
Take advantage of getting an edge over your fellow market participants by signing up with InvestMarkets and start trading silver as soon as possible!
It is of utmost importance to manage your risk at all times.