How to Make Money Trading Silver

Silver is a good investment, and you should probably be rushing right now to buy some 100-ounce silver bars from Money Metals Exchange.

Silver is money

Physical silver is a tangible asset with no counter-party risk or default risk. Silver has intrinsic value due to its metallic characteristics making it suitable for industrial, medical and ornamental use and due to its finite supply.

There are many reasons to buy silver, chief among them the fact that silver is money, a form of saving and a form of investment all at the same time.

There are also compelling fundamental reasons to buy silver. Demand from the silver investment bar and coin sector is strong with demand also being supported by the diverse industrial and technological applications which require silver.

However, if you need some convincing about some of the ways you can make money trading silver, the information you need is below.

We’re going to show you some of the ways you can make money trading silver.

Direct Purchase of Silver

This is the most obvious way to get into silver as you buy the metal directly. Dealers in precious metals sell silver via the internet and also in person. You can buy anywhere from a single ounce to several ounces at a time.

The advantage of this method is the value of silver bullion is well-established and moves in tandem with what is happening in the market perfectly.

Securities

Another way you can trade silver is through securities that are connected to silver on major securities exchanges. There are, for example, silver mining stocks that give you direct exposure to the market for precious metals. These stocks go up and down in tandem with the price of silver.

The beauty of this method is that you can buy and sell stocks whenever you want when the markets are open and even place orders when the markets are closed. As a result, enjoy more liquidity using this method than when you own physical silver.

One disadvantage, however, is that you’re also exposed to some business risks associated with the particular silver mining company whose stock you now own. If something happens to that company, even if the price of silver is headed for the moon, you could still suffer losses.

If you want to avoid this, you can buy silver bullion exchange-traded funds (ETFs) instead. ETFs have interests in physical silver and track the price of silver directly. Their main disadvantage is that you will incur annual fees when owning ETFs.

Silver Streaming

This process is mainly done by silver streaming companies and isn’t open to individual investors with limited funds. These companies act as financial backers for silver mining companies to gain financial interests in their activities. The silver streaming company does not mine silver.

However, the capital they provide to silver mining companies allows them to produce their own silver. The streaming company is repaid by the mining company in the form of silver at a lower price than what it is selling for in the market.

As such, the silver streaming company is exposed to the changes in the price of silver without having to deal with the hassles of mining the silver themselves.

Conclusion

Silver is a smart investment. All you have to do is understand the process and the drivers behind its price. Historically, it is a significant precious metal and, unlike certain others, is linked directly to the global business cycle.

It is an investment worth making part of your portfolio.