SHFE Will Launch Small Contracts for Silver Futures

SHANGHAI, Apr. 18 (SMM) -- Silver futures contracts will be launched on the Shanghai Futures Exchange (SHFE) recently. The SHFE will not trade contracts for silver futures like lead or coke futures, but trade small futures contracts favorable for medium to small investors.

Lot size of silver futures is 15 kg, with the minimum trading margin 7% of contract value. Daily limits are stipulated ±5% of settlement prices of the previous trading day, and the last trading date is the 15th of the delivery month (postponed for legal holidays). A warehouse warrant trades 30 kg by physical delivery, with the delivery date the fifth consecutive working day post the last trading day. Standard products for delivery should meet national requirement GB/T 4135-2002 IC-Ag99.99, with silver content no less than 99.99%. Delivery sites are appointed warehouses.

The lightspot of the launch of sliver futures contract is low requirement for investors. With SMM sliver prices at RMB 6,575/mt on April 17th, the minimum margin for a SHFE silver contract is about RMB 6,903. Even though futures companies will artificially raise margins from stipulated levels by the SHFE, margins are about RMB 9,862 for a silver futures contract with the stipulated 10%. The cut in margins for silver futures contracts will allow more investors to enter the market, and help increase liquidity of silver futures contracts, so as to better meet the demand of investors.