SILVERM

Lot size: One standard contract represents 5 kilograms. This equals five 1-kg bars.

Tick size: Minimum price movement is Re. 1 per kg. Each tick changes the contract value by ₹5.

Quotation: Prices are quoted in rupees per kilogram.

Expiry: Contracts expire on the last calendar day of the contract month. If that day is a holiday, the preceding working day. New contracts launch on the 16th day of the launch month.

Trading hours: From Monday through Friday, trading begins at 9:00 AM and concludes at 11:30 PM. However, during US daylight saving time, the session extends until 11:55 PM.

Daily Price Limit (DPL): The initial circuit breaker sits at 4%. If breached, the limit widens to 6% without a cooling-off period. If 6% is breached, a 15-minute pause follows before expanding to 9%.

Initial margin: Minimum 10% or SPAN-based, whichever is higher. Extreme loss margin applies on top.

Open Interest (OI): Total outstanding contracts across all participants. Rising OI with rising price indicates fresh long positions. Rising OI with falling price indicates fresh shorting.

Position limits: Individual clients can hold up to 100 MT or 5% of market-wide OI, whichever is higher, for all Silver contracts combined. Members can hold 1,000 MT or 20% of market-wide OI.

Maximum order size: 600 kg per order.

Delivery: Compulsory delivery at expiry. The delivery centre is in Ahmedabad at the designated clearing house facilities. The quality standard is 999 fineness. LBMA-approved suppliers are mandatory.

Lower capital requirement than standard SILVER: The 5 kg lot size means a lower margin per position. Retail traders enjoy access to the marketplace and price discovery without risking their capital.

Macro participation without physical exposure: Central bank policy, currency movements, and geopolitical events all impact silver prices. Futures enable investors to participate in price changes without owning the physical bars.

Leverage through margin: Only a margin payment is required for futures. This results in a reduced investment in the market. It also represents potential losses exceeding the margin if not managed properly.

Hedging utility for jewellers and small dealers: Companies with silver price risk exposure can use MCX futures to manage input costs. This is an obligatory delivery design that is used to facilitate this operational hedging.

Transparent, regulated infrastructure: MCX is an exchange regulated by SEBI. Prices are displayed publicly. There is a set of rules for settlement. The clearing corporation helps minimise counterparty risk.

Physical delivery option: Compulsory delivery at expiry ensures convergence between futures and spot. Sellers deliver 999 fineness silver in 1-kg bars. Buyers receive LBMA-approved bars with quality certification.

Directional long or short: Buy futures if you expect prices to rise. Sell if you expect a fall. This is the simplest approach. Risk management in terms of position size relative to margin is critical.

Month-to-month spread: Buy one expiry month while simultaneously selling another. Profit depends on the movement of the difference between the two months. Spreads generally require a lower margin and carry lower volatility.

Jeweller or dealer hedge: A jeweller holding physical silver can sell futures to secure a selling price. If spot prices rise, the physical gain offsets the futures loss. If they fall, the futures profit offsets the physical loss.

Arbitrage between MCX and global markets: If the MCX price differs considerably from the London price after taking currency and duty costs into consideration, a reversion trade could be considered. This requires knowledge of both markets.

Track US Federal Reserve policy: Rate decisions and forward guidance influence the dollar and, by extension, silver. Monitor FOMC statements, dot plots, and press conferences.

Watch USD/INR alongside the London spot: MCX prices are influenced by the rupee-dollar rate. A weaker rupee supports domestic prices even as London rates remain flat.

Factor in Indian festival demand: The wedding season and year-end buying boost physical demand. This can push MCX premiums above London prices.

Monitor the central bank buying reports: The World Gold Council provides quarterly data on nations accumulating precious metals. Sustained buying establishes long-term price floors.

Account for daily MTM and margin calls: MCX settles profits and losses every evening. Silver can gap on geopolitical events or central bank surprises. Size your trades to survive margin calls. Do not size based on the minimum margin alone.

Use custom and India timeframes: A trend visible on the daily SILVERM futures chart may differ from the hourly view. Dhan's Custom Timeframes and India Timeframes let you align both before entering.

Use the Dhan Trade Plan for position sizing: Trade Plan is a built-in tool on Dhan Charts. Input your capital allocation percentage, risk percentage, and reward percentage. It calculates your exact quantity, stop-loss level, and target price automatically.

Square off before expiry if you do not want delivery: Most retail traders do not intend to take or give physical delivery. Exit well before the last trading day to avoid compulsory delivery obligations.

Size positions within capital limits: The ability to take a large position with a small margin is not a reason to do so. Keep single-trade risk within a defined percentage of your total capital. Use the Trade Plan to enforce this discipline.