SILVER TRADING FUNDAMENTALS

The Poor Man's Gold - Industrial Metal Meets Precious Metal

WHY SILVER? - The Dual-Nature Metal

Silver's Unique Position

The Hybrid Metal:

Silver is BOTH precious AND industrial
= More complex than gold
= More volatile than gold
= More opportunity for traders

As Precious Metal (50%):

• Monetary history like gold
• Store of value for millennia
• Safe haven during crises
• Correlates with gold (0.80+)
• "Poor man's gold" (more affordable)
• Investment demand significant

As Industrial Metal (50%):

• Essential in electronics (conductivity)
• Solar panels (massive demand)
• Electric vehicles (EV boom)
• Medical applications (antibacterial)
• Photography, water purification
• Cannot be easily substituted
• Industrial demand = 50%+ of total

The Volatility Factor:

Silver moves 2-3x more than gold
Gold up 5% -> Silver up 10-15%
Gold down 5% -> Silver down 10-15%
= Greater profit potential
= Greater risk exposure

Market Size:

Annual production: ~1 billion oz
Total above-ground stock: ~2 billion oz
Much smaller market than gold
= Easier to move price (volatility)
Gold/Silver Ratio: 80-90 typically
Means 1 oz gold = 80-90 oz silver

Silver vs Gold Trading

Key Differences:Volatility:

Gold daily range: $10-40 typical
Silver daily range: $0.50-2.00 typical
But silver contract = 5,000 oz vs gold 100 oz
Silver dollar moves LARGER

Price Action:

Gold: Smooth, steady trends
Silver: Choppy, violent moves
Gold: Better for beginners
Silver: For experienced traders

Correlation Breakdown:

Strong trends: Silver follows gold closely
Weak trends: Silver more independent
Risk-off: Both rise, silver faster
Risk-on: Both fall, silver faster
Industrial data: Silver unique reaction

Trading Advantages:

&check; More movement = more opportunity
&check; Smaller contract size available (Micro)
&check; Multiple fundamental drivers
&check; Technical levels very reliable
&check; Explosive trend moves possible

Trading Challenges:

X Higher volatility = wider stops
X Can whipsaw more than gold
X Requires faster decision making
X More false breakouts
X Gaps more common

Who Should Trade Silver:

&check; Experienced gold traders
&check; Those comfortable with volatility
&check; Higher risk tolerance traders

January 2026 Silver Rally

The Current Situation:

As of January 2026:
Silver: ~$32.50/oz (+15% in 6 weeks)
Gold: ~$2,700/oz (+8% same period)
Gold/Silver Ratio: ~83

What's Driving The Rally:1. Fed Pivot Expectations:

• Market pricing 2-3 rate cuts in 2026
• Real rates turning negative
• Precious metals thriving
• Silver outperforming gold

2. Industrial Demand Surge:

• Solar panel production accelerating
• EV adoption expanding globally
• AI/data center demand (electronics)
• Supply deficit projected for 2026

3. China Economic Stimulus:

• Massive infrastructure spending
• Green energy push (silver intensive)
• Manufacturing rebound

4. Investment Flows:

• SLV ETF inflows accelerating
• Retail "catch-up" to gold rally
• Silver seen as "cheaper" alternative

Technical Picture:

• Broke above $30 resistance (major)
• Now testing $33-34 zone
• 50/200 EMA golden cross confirmed
• Strong uptrend intact

Trader Implications:

Trend following working perfectly
Buy dips to support continue working

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HOW TO TRADE SILVER - Markets & Instruments

Silver Futures Contracts

1. SI Futures (COMEX):

Symbol: /SI (full-size silver)
Contract Size: 5,000 troy oz
Tick: $0.005 per oz = $25 per contract
Point Value: $5,000 per $1 move
Example: Silver moves $30 -> $31
• $1 move = $5,000 profit/loss!
Margin: ~$10,000-14,000 initial
Notional Value: ~$162,500 (at $32.50)

Advantages:

&check; Most liquid silver contract
&check; Tight spreads ($0.005 typical)
&check; 23 hours/day trading
&check; High leverage (~12:1)

Disadvantages:

X Large position size
X $0.50 move = $2,500 swing
X Needs larger account ($25K+)
X Contract expiration/rollover

2. SIL Micro Silver (/SIL):

Contract Size: 1,000 troy oz
Tick: $0.005 = $5 per contract
Point Value: $1,000 per $1 move
Margin: ~$2,000-2,800 initial
Notional: ~$32,500 (at $32.50)

Perfect for:

&check; Smaller accounts ($5K-25K)
&check; Learning silver trading
&check; Better position sizing control
&check; 1/5 the risk of SI

Contract Specifications:

Trading Hours: Sun 6PM - Fri 5PM ET
Months: Mar/May/Jul/Sep/Dec (5 per year)
Most Active: Front 2 months

ETFs & Other Instruments

Silver ETFs:SLV (iShares Silver Trust):

• Most liquid silver ETF
• 1 share ~ 1 oz of silver
• Price ~$32-33 (mirrors silver)
• Great for long-term investors
• Options available for leverage

PSLV (Sprott Physical):

• Backed by physical silver in vault
• Can redeem for physical (1,000 oz min)
• Lower expense ratio than SLV

AGQ (2x Leveraged):

• 2x daily silver moves
• Silver up 5% -> AGQ up ~10%
• High risk - decay over time
• Day trading only recommended

Silver Mining Stocks:

Leverage to silver price (3-5x)

Major Miners:

• First Majestic (AG)
• Wheaton Precious Metals (WPM)
• Pan American Silver (PAAS)
• Hecla Mining (HL)

Miner ETF:

• SIL (Global X Silver Miners)
• SILJ (Junior Silver Miners)

Warning on Miners:

• More volatile than silver itself
• Company-specific risks
• Can underperform silver in rallies
• Better for stock traders, not futures

Recommendation:

Active traders: Use /SIL futures

ACCOUNT SIZE & RISK MANAGEMENT

Minimum Account Requirements

For SI Futures (5,000 oz):

Absolute Minimum: $20,000
• $14,000 margin requirement
• $6,000 buffer for drawdown
• EXTREMELY risky at this level
• $0.50 adverse move = -$2,500 (-12.5%)
• NOT recommended for most

Recommended: $30,000-40,000
• Allows 2-3% risk per trade
• Room for volatility
• Can withstand normal swings
• Proper risk management possible

Comfortable: $50,000+
• Trade 1-2 contracts safely
• Professional flexibility
• Weather $1 moves without stress

For SIL Micro (1,000 oz):

Minimum: $5,000-7,000
• $2,800 margin + buffer
• Good for learning
• 1/5 the risk of SI

Recommended: $10,000-15,000
• Trade 2-3 contracts
• Proper position sizing
• Best for most retail traders

For Silver ETFs (SLV):

Any amount ($500+ practical)
• Buy fractional shares if available
• Perfect for smaller investors
• Less leverage = slower growth
• Consider options for leverage

Position Sizing & Volatility

Silver's Wild Swings:

Silver moves FAST and HARD
Typical intraday: $0.30-0.80
Volatile days: $1.00-2.00
Crisis events: $3.00-5.00+
1 SI contract @ $1 move = $5,000 P/L

2% Risk Rule Examples:$10,000 Account (SIL):

Max Risk: $200 (2%)
Stop Loss: $0.50 from entry
Risk per SIL: $0.50 x 1,000 = $500
Max Contracts: $200 / $500 = 0.4
Trade: 0 contracts (too large)
Solution: Tighter stop ($0.20) = 1 SIL

$30,000 Account (SI):

Max Risk: $600 (2%)
Stop Loss: $0.30 from entry
Risk per SI: $0.30 x 5,000 = $1,500
Max Contracts: $600 / $1,500 = 0.4
Trade: 0 contracts (too large)
Solution: Use 2 SIL instead

$50,000 Account (SI):

Max Risk: $1,000 (2%)
Stop Loss: $0.40 from entry
Risk per SI: $0.40 x 5,000 = $2,000
Max Contracts: 0.5 -> Round to 0 or 1
Trade: 1 SI (acceptable with discipline)

Critical Insight:

Silver requires WIDER stops than gold
Gold: $15-25 stops common
Silver: $0.30-0.60 stops needed
Factor this into position sizing!

SILVER TRADING HOURS & BEST SESSIONS

Trading Hours: Silver trades nearly 24 hours. Sunday 6:00 PM ET to Friday 5:00 PM ET. Daily 1-hour break 5:00-6:00 PM ET. Same as gold but silver is MORE volatile during less liquid hours. Be careful in Asian session.
Best Trading Times (8:00 AM - 12:00 PM ET): London/NY overlap = highest volume. Tightest spreads. Most reliable price action. Silver follows gold closely during these hours. This is YOUR window. 80% of trading should happen here. Avoid everything else until experienced.
Dangerous Times (Avoid These): Asian session (6 PM - 3 AM ET) = low volume, wide spreads, false moves. Sunday open (6-8 PM) = gaps, terrible fills. Post-3 PM ET = liquidity dries up. Silver can gap $0.20-0.50 overnight easily. Close positions or use WIDE stops if holding overnight.
Industrial Data Impact: Silver unique: reacts to manufacturing data. China PMI (monthly, 9:45 PM ET previous day) moves silver. US Manufacturing ISM (1st business day, 10 AM ET) impacts silver. Solar/EV industry news = silver specific catalyst. Watch these in addition to typical gold drivers (Fed, inflation).
Contract Rollover: Silver contracts expire 3rd-to-last business day of contract month. First Notice Day: ~25th of prior month. CRITICAL: Close before FND or physical delivery of 5,000 oz bars! Roll 7-10 days before expiry. Most active: Front month only (unlike gold which trades 2 months actively). Watch volume carefully.

Silver: More volatile, more opportunity, more risk. Trade it with respect and precision. - TradeHive

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SILVER TRADING DISCLAIMER

Silver futures trading involves substantial risk of loss and is not suitable for all investors. Silver is significantly more volatile than gold - price swings can be extreme and rapid. Leverage amplifies both gains and losses. Silver's dual nature (precious + industrial) creates unique risks. Industrial demand can collapse in recessions. Physical delivery is possible if positions held through First Notice Day. Account size recommendations are minimum guidelines not guarantees of success. The current January 2026 rally discussed is historical context not a prediction or recommendation to buy. Market conditions can reverse without warning. Past performance of silver rallies is not indicative of future results. Silver can experience prolonged bear markets. Overnight gaps are common and can trigger stops or cause slippage. Margin requirements vary by broker and market conditions. ETF holdings involve management fees and tracking error. Silver mining stocks carry company-specific risks beyond silver price. Asian session trading is particularly risky due to low liquidity. This material is for educational purposes only and does not constitute trading advice or recommendations. Current market analysis is educational not predictive. Consult licensed professionals before trading. TradeHive is not liable for trading losses. Trade at your own risk. Only trade with capital you can afford to lose entirely.