InvestorQ : I want to trade the Silver futures contract on the MCX. How can I get more details of the contract?
Aswini Chikkodi made post

I want to trade the Silver futures contract on the MCX. How can I get more details of the contract?

Answer
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Ayushi Kampani answered.
2 years ago


On the MCX, silver is available for trading in four sub-contracts. The most popular is the Big Silver contract, which comes with a minimum lot size of 30 KG. In terms of popularity, Big Silver is followed by Mini Silver which is traded in lot sizes of 5 KG. In addition, there is Silver Micro and Silver 1000; both of which trade in lot sizes of 1 KG. However, these contracts are not as popular as the Big Silver and the Mini Silver contracts.

Currently, trading in silver futures attracts 4% SPAN margin and 1% extreme loss margin. For a trader in silver this is what is relevant. Of course, there will be delivery margins as the contract gets closer to delivery but that is only case of physical delivery of silver.

For the Big Silver contract, the lot size value works out to Rs.56,550/- (Rs.37,700 X 30 KG X 5%). Of course, the margin required for the Silver Mini and the Silver Micro contract will be proportionately lower.

At any point of time, there will 5 open contracts on silver. Each the monthly contracts 5 months ahead will be launched. For example, in August 2017, the contract for January 2018 will be launched and then it will continue sequentially. The Big Silver contract expires on the 5th of the month while the other 3 contracts expire on the last day of the month.

Since the silver contract of 30 KG (Big Silver) expires on the 5th of each month, the square off in case of non-delivery positions will have to be ideally completed before the 1st of the month. You can get substantially more operational details about the silver contracts from the MCX website where detailed information is available on the product.