Know Your Commodity Before You Trade – SILVER

05 Jun 2026|

3 min read |

by ICICI Securities Team

Silver: A Precious Metal Valued for More than Its Shine

Of all the precious metals, silver serves perhaps the widest range of applications.

Not only has it been a store of wealth for generations, but it also has extensive industrial applications.

That’s what sets it apart from gold - the demand for which is primarily investment and jewellery-driven.

This gives silver distinct price dynamics and, for informed traders, a wider range of entry points and strategic opportunities.

Let's take an in-depth look at silver as a commodity and what you need to know before you start trading it.

Usage of Silver

Today, silver is an essential component across a wide range of industries:

Solar energy: A critical material in photovoltaic cells, with demand rising alongside the global expansion of solar capacity
Electric vehicles (EVs): Used in EV components and charging infrastructure
Semiconductors and electronics: Found in circuit boards, connectors, and consumer devices due to their unmatched electrical conductivity
Batteries: Increasingly used in next-generation energy storage solutions
Consumer electronics: Present in smartphones, laptops, and other everyday devices

From a trader’s perspective, silver’s widespread use makes it more volatile than gold, thereby generating frequent price signals that can translate into both opportunity and risk.

Silver Contract Variants Available on MCX

Commodities are traded in standardised units called lots. Each silver contract has a fixed lot size, which determines the quantity of silver you buy or sell in a single trade.

Here’s the breakdown:

Silver Variant
Future			Option
Underlying Code	Underlying Name	Lot Size	Underlying Code	Underlying Name	Lot Size
SILVER	SILVER	30 kg	SILVER	SILVER	30 kg
SILMIN	SILVER MINI	5 kg	SILMIN	SILVERMINI	5 kg
SILMIC	SILVER MICRO	1 kg
SIL 100	SILVER 100	100 g

As participation in commodity markets grows, MCX has introduced Silver 100 — a new futures contract designed for retail investors and smaller market participants. Launched on June 1, 2026, the contract represents 100 grams of silver, which expires on the last working day of the expiry month and whose price is quoted per 10 grams.

Until now, traders could choose from Silver (30 kg), Silver Mini (5 kg), and Silver Micro (1 kg) contracts. Silver 100 significantly reduces the capital requirement, giving retail traders, small jewellers, and businesses a practical way to participate in or hedge against silver price movements.

Key features of Silver 100:

Lower margin requirement compared to larger silver contracts
Better risk management for retail traders
Easier participation in silver price movements
Suitable for small hedging requirements
Exchange-regulated and transparent pricing

Trading Hours for Silver on MCX

Silver contracts trade on MCX from Monday to Friday, 9:00 AM to 11:30 PM (11:55 PM when adjusting for the US Daylight Saving period). The extended hours allow Indian traders to track and respond to global market movements in real time.

What is Expiry in Silver Trading?

Every silver futures contract has an expiry date, the last day on which it can be traded. The period just before expiry is called the staggered delivery period, during which having open positions can result in actual physical delivery of silver.

What is End of Settlement (EOS)?

End of Settlement (EOS) is the final settlement process conducted by the broker, generally before the beginning of the delivery period of the respective contract.

What is the Delivery Period?

The delivery period is the window during which traders with open positions can participate in the physical delivery process.

The staggered delivery tender period comprises the last trading days of the contract, including expiry day—5 trading days for Silver and Silver Mini, and 3 trading days for Silver Micro and Silver 100.

During this period, buyers and sellers may submit their intention to take or give delivery. Any open positions remaining on the expiry day are subject to compulsory delivery.

MCX Silver Reference Rate

MCX silver settlement prices are linked to the LBMA Silver Price, administered by the London Bullion Market Association (LBMA), a globally recognised benchmark for silver pricing.

Factors Affecting Silver Prices

US Dollar Movement: Silver typically moves inversely to the US dollar.
Interest Rates: Higher interest rates can reduce the appeal of non-yielding assets such as silver.
Industrial Demand: Demand from the solar, EV, electronics, and manufacturing sectors influences prices.
Geopolitical Developments: Conflicts, trade disputes, and economic uncertainty can boost safe-haven demand.
Inflation Expectations: Silver is often viewed as a hedge against inflation.
Economic Growth: Stronger economic activity generally supports industrial consumption of silver.

Risks Involved in Silver Trading

Commodity trading involves substantial risk, including:

Price Volatility: Silver prices can move sharply in response to inflation data, interest rate expectations, currency movements, and geopolitical developments.
Leverage Risk: Futures trading allows traders to control larger positions with smaller margins, which can magnify both potential profits and losses.
Delivery Risk: Holding positions near expiry during the tender delivery period may result in delivery obligations.
Liquidity Risk: Certain contract months may experience lower trading volumes, impacting trade execution.
Global Market Risk: Silver is highly sensitive to US Federal Reserve policy, inflation trends, and changes in industrial demand.

Top Silver Producing Countries

Mexico
Peru
China
Russia
Bolivia
Chile
Poland

In Conclusion

Silver's dual role as an investment asset and industrial input makes it one of the more dynamic commodities to trade. With the launch of MCX Silver 100, retail participation has become more accessible — but it’s imperative that you understand contract specifications, expiry, settlement, and risk management remain essential before taking a position.

Disclaimer