What is the Silver Price? | Definition and Example


Silver Price is the current cost of one ounce of silver for immediate purchase. The determination of the price of all commodities depends upon the demand and supply forces in the market. Silver as a commodity is similar to gold when it comes to determining its price. Speculation, demand, and supply determine the silver price. Investors usually pay a premium on top of this spot price for physical silver.

Silver price in a nutshell

  • Silver price represents the immediate purchase cost of one ounce of silver.
  • Silver’s price is influenced by various factors including demand, economic conditions, and industrial usage.
  • Investors commonly pay a premium above the spot price for physical silver.
  • Trading silver offers high volatility and potential for substantial profits.

Understanding Silver

As a commodity, silver is traded worldwide on global exchanges alongside other precious metals like gold and platinum. Silver, like gold, makes one of the best investments for any trader. It not only acts as a form of money, but is also a great store of value for an investor.

Benefits of Trading Silver

Many traders choose to trade silver over gold. It is because trading silver offers them a chance to earn more profits. After all, it has high volatility. The silver market is generally small. The liquidity in the silver market is low, and there are various fluctuations in demand. These conditions create a very highly volatile market for trading silver. Like gold, silver is also a great store of value for money.

History of Silver Prices

The price of silver is ever-changing in the market. Generally, the price of silver is set, keeping the price of gold in view. Thus, before trading silver, a trader analyses the gold-silver price ratio. This price ratio was 12 in Roman times. It meant that one troy ounce of gold was equal to 15 troy ounces of silver.

With the onset of new centuries, silver prices have only increased. After September 2005, the price of silver reached $14 per troy ounce. It reached a 31-year-high in 2011 when monetary inflation set in, leading it to an amount of $49 per ounce.

What affects the Price of Silver?

Even though the silver market has a much narrower scope than the gold market, the prices of silver are highly volatile.

  • Silver’s several properties make it a major trading commodity. Photovoltaic use silver in their manufacturing. RFID tags, food hygiene, and jewelry are also used in the medical industry.
  • When inflation, deflation, and devaluation sets in, traders use silver to hedge against them. It, in turn, affects the price of silver.
  • The demand is another factor affecting silver’s market price. Silver trading also follows basic economic laws while circulating in the market. If the demand for silver is higher than its supply, its price will increase. However, if the demand is lower than the supply, its price falls. 

How to trade Silver with Binary Options?

Trading silver through binary options can be a straightforward way to profit from silver price movements. Here’s a comprehensive guide on how to effectively trade silver using binary options:

1. Choose a Reliable Broker

Choose a trusted broker that offers binary options trading and access to silver trading alongside other financial instruments.

Here are three recommended binary options brokers that are known for their security measures, competitive returns and worldwide accessibility. Each broker allows you to open a risk-free binary demo account for practice.

Broker:
Review:
Advantages:
The offer:
Yield: 97%+
12345
5.0/5
  • Welcomes international clients
  • Offers high payouts: 90% – 97%+
  • Professional-grade trading platform
  • Swift deposit process
  • Enables Social Trading
  • Provides free bonus incentives

$ 5

   Visit broker

(Risk warning: Trading is risky)

Yield: 95%+
12345
5.0/5
  • Min. deposit $10
  • $10,000 demo
  • Professional platform
  • High profit up to 95%
  • Fast withdrawals
  • Signals

$10

   Visit broker

(Risk warning: Trading is risky)

Yield: Up to 100%
12345
5/5
  • $10 minimum deposit
  • Free demo account
  • High return up to 100% (in case of a correct prediction)
  • The platform is easy to use
  • 24/7 support

$10

   Visit broker

(Risk warning: Trading is risky)

Broker:
5.0/5
12345
Yield: 97%+
Advantages:
  • Welcomes international clients
  • Offers high payouts: 90% – 97%+
  • Professional-grade trading platform
  • Swift deposit process
  • Enables Social Trading
  • Provides free bonus incentives
The offer:

$ 5

Visit broker

(Risk warning: Trading is risky)

Broker:
5.0/5
12345
Yield: 95%+
Advantages:
  • Min. deposit $10
  • $10,000 demo
  • Professional platform
  • High profit up to 95%
  • Fast withdrawals
  • Signals
The offer:

$10

Visit broker

(Risk warning: Trading is risky)

Broker:
5/5
12345
Yield: Up to 100%
Advantages:
  • $10 minimum deposit
  • Free demo account
  • High return up to 100% (in case of a correct prediction)
  • The platform is easy to use
  • 24/7 support
The offer:

$10

Visit broker

(Risk warning: Trading is risky)

2. Set Up Your Binary Options Trading Account

Register for a binary options trading account once you have selected a broker. To get started trading silver with binary options, you usually have to share basic personal details, set up a secure login, and verify your identity as per regulations. Some brokers offer quicker sign-up options through social media profiles.

Open a Binary Options Trading Account Pocket Option

3. Demo Account and Deposit Money

Use a demo account to practice trading silver binary options without risking real money. When ready, deposit funds into your trading account using a secure payment method supported by the broker.

4. Select Silver as Your Asset

In binary options trading, you can bet on whether the prices of different things, like precious metals such as silver, will go up or down. Opt to trade silver as your chosen asset.

5. Use Indicators for Informed Decisions

Create a trading plan by thoroughly studying the silver market. Decide if you think silver prices will go up (Call option) or down (Put option) in a set time. Use various technical indicators like MACD, RSI and Bollinger Bands to find good times to enter and exit trades.

  • MACD (Moving Average Convergence Divergence): A trend-following indicator that signals buying opportunities when its line crosses above the signal line and selling opportunities when it crosses below.
  • RSI (Relative Strength Index): Identifies overbought conditions (above 70) as selling opportunities and oversold conditions (below 30) as buying opportunities.
  • Bollinger Bands: Indicate potential selling opportunities when the price touches or crosses the upper band (overbought) and buying opportunities when it touches or crosses the lower band (oversold).

6. Select Expiry Time

Binary options contracts have set expiry times, giving traders flexibility. When trading silver, pick an expiry time that suits your strategy and how much risk you’re comfortable with. Platforms like Pocket Option offer various expiry times, from as short as 5 seconds to a maximum of 4 hours.

Binary Options Expiry Times (5 seconds to 4 hours)

  • 5 seconds: Quick profits and rapid market reaction.
  • 15 minutes: Short-term trading with time for analysis.
  • 1 hour: Balanced approach for analysis and trading.
  • 4 hours: Allows thorough analysis and strategic decisions.

7. Investment Amount

Decide how much money you want to put into the trade, considering any limits the broker has and how much risk you’re comfortable with. For Example, on Pocket Option, traders are limited to a maximum investment of $5000 per trade.

Just remember, if the trade doesn’t go well, you could lose all the money you put in.

8. Execute and Monitor Trade

Once all parameters are in place, execute the trade by selecting either a “Call” (Higher) or “Put” (Lower) option. Some brokers may require additional verification steps before trade execution. Keep an eye on your trade until it expires, and if possible, check if there’s an option to close it early.

If your prediction is right, you’ll get a payout. This can range from 50% to 96% of what you initially invested, depending on your broker. On Pocket Option, the payout for silver trading stands at 86% of the invested capital.

Conclusion

Silver price is not a complicated thing to understand. It is only the price of silver that exists in the international market. Traders trade silver at this price that prevails in the international market to earn profits. Silver is also one of the highly profitable commodities in the market. These are volatile and offer great protection against inflation and deflation. 

About the author

Percival Knight
Percival Knight is an experienced Binary Options trader for more than ten years. Mainly, he trades 60-second trades at a very high hit rate. My favorite strategies is by using candlesticks and fake-breakouts

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