Silver is rather a convenient underlying security to trade binary options. This is due to fairly simple forecasting. However, silver trading requires special knowledge.
Though silver doesn’t have such investment grades as gold, it mirrors investment market sentiment because it is used in production.
Silver is traded on the COMEX, the commodity exchange, under the ticker symbol .SIv1.
This commodity exchange is based in New York, the United States. It was found in 1933. In 1994, the COMEX and NYMEX merged. Today, the COMEX ranks first in crude oil futures trading.
Along with “black gold”, gas, ethanol, platinum, coal, gold, aluminum, copper is traded there.
Silver on the Commodity Exchange
The Factors That Affect Silver
Silver pricing on the commodity exchange is affected by demand for this precious metal in the jewelry industry and production.
Ranking second after gold, this precious metal is in great demand. It is widely utilized in the computer production. Besides, unlike other precious metals, it is used as store of value.
Therefore, to trade silver you can’t rely on guesswork. You need to have in mind an ocean of different factors that affect silver price and do comprehensive analysis of the future price fluctuations.
Generally, to do a silver price forecast is not difficult. The matter is that silver price doesn’t fluctuate frequently, and this makes you more confident in the positive result.
The price of silver as well as other precious metal and resources are considerable affected by the world reserves available for exploration. This means that limited resources are to appreciate. These resources are exhausted which causes supply and demand imbalance. If demand for silver rises, and supply falls, the price increases.
If demand for this precious metal falls, then you can expect its price to decrease. Besides, there are some unique factors impacting the silver price.
Silver price is largely affected by the currency rates as it directly correlates with some currencies. Also, you need to have in mind that silver is one of the means of savings. Its price depends on the key interest rates set by the central banks. Change of the key rates is one of the factors that affect currency rates and hence silver price.
Supply and Demand for Silver
Today, the world’s top silver producers are Mexico, Peru, China, Bolivia, Chile, and Poland. You need to consider the volumes produced in these countries when you assess supply and demand volumes.
Increase in production volumes results in growth of supply and hence silver depreciation.
The main consumer of silver is an industrial sector. It accounts for over 50% of world’s demand. This means that purchasers of the precious metal are the key figures in silver pricing. Therefore, you need to monitor the jewelry sector demand in which can vary.
Today, demand exceeds supply. If this value keeps rising, the price of silver will rise as well. If the value falls, you can expect the price to decrease.
Doing your analysis, you can also use experts’ forecastы. However, you should also keep in mind the following rule “Trust but verify”. If you do your own analysis, you can both increase your return and make binary options trading extremely comfortable.
How to Make a Profit on SILVER
Today, I will show you how you can earn trading binary options on silver.
Though there is much data on silver reserves, demand and supply, their figures are updated infrequently. Therefore, I advise you to base your projections on technical analysis.
Most of analysts base their silver forecasts on technical analysis.
To make a profit on silver, I advise you to pay attention to binary options. Trading the options, you can make a 70% or more profit in just 15 to 30 minutes. And the only thing you need is to forecast the direction the price will take. You don’t even need to forecast how much it will alter.
If you buy an option for 20 minutes, you need to do a price forecast for 20 minutes, that is, whether the price will rise or fall during this period. If your forecast is accurate, you immediately get a return.
I choose AnyOption, the reliable well-known binary options broker. I browse the home page and and select Silver as an underlying security. I set the expiry to 6:30 p.m., the amount of investment and click PUT as I expect the price to fall down:
After expiry, I check the result:
The price has bounced a little. I’ve made $172 or a 80% net profit!
If you trade binary options, to make a profit on silver is an easy task. Anyone can cope with it. Besides, AnyOption provides such underlying securities as EUR/USD, AUD/JPY, Apple, Daimler AG stock, crude oil etc.