This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Quick Take: Check Out the Mini Silver Contract

NEW YORK ( TheStreet) -- TheStreet's Joe Deaux spoke to Phil Streible of RJO Futures on Monday about the impact of new, smaller silver contracts.

The CME Group (CME) now offers a 1,000-ounce contract for silver, which carries a much smaller margin requirement than the bigger, 5,000-ounce contract, according to Streible.

Streible added that with silver trading around $21 per ounce, the mini contract's full value is only about $21,000, as opposed to the full contract's value of approximately $105,000.

By being one-fifth the size, it makes it easier for investors to get exposure to silver rather than paying the premium associated with pawn shops and coin stores.

Deaux wanted to know why the contracts are just now hitting the markets. Streible agreed these smaller contracts have existed before, but they failed to gain traction until now because of liquidity issues and finding the proper market makers.

He added that when things are going well in the silver market, the smaller contract has a very wide bid-ask spread, making it hard to get reasonable fills and can exacerbate the selling pressure. Streible said these problems have been addressed and that the contracts should receive positive feedback.

As for the price of silver, it has generally lacked the upward move seen in platinum and palladium. Instead, it has been tracking the movement of gold and will likely experience some added volatility in the coming days with the Federal Reserve meeting, Streible said.

"We've seen that type of V-shaped pattern the last three or four Fed announcements," he added, referring to the typical rally in precious metals from continued stimulus followed by some falling.

-- Written by Bret Kenwell in Petoskey, Mich.

Bret Kenwell currently writes, blogs and also contributes to Rocco Pendola's Weekly Options Newsletter. Focuses on short- to intermediate-term trading opportunities that can be exposed via options. He prefers to use debit trades on momentum setups and credit trades on support/resistance setups. He also focuses on building long-term wealth by searching for consistent, quality dividend paying companies and long-term growth companies. He considers himself the surfer, not the wave, in relation to the market and himself. He has no allegiance to either the bull side or the bear side.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.99 0.31%
FB $102.01 0.10%
GOOG $682.40 -0.10%
TSLA $151.04 0.38%
YHOO $27.04 1.05%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs