S
2,52,271.00
797.00 (0.32%)
MCX
S
SILVERM
2,52,271.00
MCX
Overview
SILVERM is the 5-kilogram mini contract. It offers exposure to silver price movements with a lower capital requirement than the standard 30-kilogram lot. Retail traders use it to take positions without committing a large margin.
India consumes silver in jewellery, electronics, and the solar sectors. Domestic prices adjust through the USD/INR rate and import duties. For traders, this means global price shifts are reflected in MCX within the same session. SILVERM options allow you to trade that volatility with defined risk.
Factors influencing the SILVERM option prices
The MCX SILVERM options are based on the underlying futures contract. All option premiums begin at the futures price.
Mexico, Peru, and China have the largest reserves of silver in the world. A disruption in the mines creates a shortage of supply and drives prices up.
Electronics, solar panels, and medical equipment are all industrial applications. An improvement in the manufacturing sector is helping to boost consumption.
Investment demand follows inflation fears and debasing of the currency. As investors purchase silver-backed ETFs, the spot price increases.
Silver is trading against the US Dollar Index. The price of the metal is quoted in USD worldwide. When the dollar strengthens, it is expensive for those who are not buying dollars. This is passed on via the USD/INR rate.
Holding costs are influenced by interest rates. The higher the rates, the more costly it is not to yield the assets. This may affect the demand for investments.
Implied volatility is increased by geopolitical events and macro data releases. The higher the uncertainty, the greater the option premiums will widen. SILVERM IV is frequently ahead of the big news.
How are SILVERM rates decided for options?
Intrinsic value is the amount by which the option is in-the-money. A call with a strike of ₹92,000 is ₹2,000 in-the-money when futures trade at ₹94,000.
Several inputs are needed to determine the time value. First is the time to expiry. The longer, the more uncertain, and the higher the premium.
The second is the implied volatility. The greater the market's expectations for larger swings, the higher the IV will be. This increases premiums on ALL strikes.
It doesn't matter how far away from the current futures price the price is. The most expensive options are at-the-money options. Deep out-of-the-money options have minimal to none.
The Black Scholes model is used as a benchmark model at MCX. The actual prices are determined in a continuous order-matching mechanism. This is the live price discovery that can be seen on the SILVERM option chain.
Key metrics to look at while trading in SILVERM options
Strike Price: This is the reference price for any SILVERM options contract. Strikes with high OI concentration often act as strong support or resistance levels on the chart.
Premium: Premium is what the market currently charges for a SILVERM options position. For buyers, it represents the total capital at risk on that trade.
Open Interest (OI): OI reflects the total number of live contracts at each SILVERM strike. An increase in OI at a particular level suggests fresh money is building there.
Change in OI: This metric shows whether positions are being added or exited across SILVERM strikes. Rising OI alongside rising price points to fresh longs; rising OI with falling price points to fresh shorts.
Put Call Ratio (PCR): PCR is calculated by dividing the total put OI by the total call OI in SILVERM. Monitoring PCR trends across sessions gives a clearer picture of prevailing market sentiment.
Implied Volatility (IV): IV is the volatility expectation that gets baked into a SILVERM option's premium. When IV rises, it signals that the market is anticipating a larger price move ahead.
Delta: Delta tells you how much a SILVERM option's price shifts per one-rupee move in futures. ATM options generally carry a delta in the range of 0.5.
Theta: Theta is the rate at which a SILVERM option loses value each passing day. The decay becomes most pronounced during the final week before expiry.
How to read SILVERM option chain data?
Benefits of analysing SILVERM data on the option chain
Outlines focus areas: Strikes with high OI will become reference points. These levels can often move in tandem with price as expiry gets close.
Uncovers a degree of sentiment without interpretation: Strike distribution gives us an idea of the market structure. There is no need for a story.
Improves timing: A price move that has strong participation (OI/Volume) is not necessarily the same price move as one that has limited participation.
Useful in risk assessment: A comparison of IV levels to recent history indicates premiums are either raised or lowered. This helps with the selection of strategies.
SILVERM option chain live data is updated in real time: OI and premium changes are not delayed for traders.
Most commonly used strategies in SILVERM options
Long Call / Long Put: If you believe SILVERM is going to see an uptrend, you should take a call. The put is a buy if the price is anticipated to decline. The risk applies only to the amount of the premium paid. This is appropriate for views forward of known events.
Bull Call Spread: Make an investment in a less costly strike call. Short a call with a higher strike. This will bring down the net premium, but limit the maximum profit. Use when the upside-down view is medium.
Bear Put Spread: Purchase a higher strike put. Selling a lower strike put. This is an inexpensive stance that will lead to a somewhat reduced position.
Long Straddle: Purchase a call and put on the same strike price. The prospect of a big move in either direction. Helpful in situations where you don't know the direction but do know the magnitude.
Short Strangle: Go short out-of-the-money call and out-of-the-money put. Collects premiums from both sides. If SILVERM remains in a range, profits will be generated. Unlimited risk with the price moving sharply.
Calendar Spread: Purchase an option that extends for a long time. Short an option that is a near-month. Takes advantage of the disparity in time decay between expiries.
How to trade in SILVERM options on Dhan?
Open your account: Create a commodity trading account on Dhan and complete full KYC with a registered broker.
Add funds: Add money to your trading account and ensure sufficient margin is available for your SILVERM options positions.
Pick your contract: Choose the SILVERM options contract based on your preferred expiry and strike price. Each lot on MCX represents 5 kilograms.
Read the market data: Analyse the SILVERM option chain along with open interest (OI), volume, implied volatility (IV), and price trends.
Place your trade: Execute your order using the appropriate order type. For strikes with wider bid-ask spreads, limit orders tend to give better fills than market orders.
Track your position: Monitor SILVERM price movements, OI shifts, and IV changes actively through the session.
Adjust when needed: Modify or exit positions based on market developments, price behaviour around key OI levels, and your original strategy.
Know the contract type: The SILVERM commodity options in India follow European-style settlement. They can be exercised only at expiry, not before.
Tips on using SILVERM option chain data effectively
Do not rely on a single session's OI. Positions build over days. Compare SILVERM OI data across two to three sessions before drawing conclusions.
Pair OI data with price action. OI tells you where positions sit. Price action tells you whether those positions are holding or breaking. Both together are more useful than either alone.
Watch IV before high-impact events. SILVERM implied volatility tends to rise before US economic data, Fed decisions, and currency movements. After the event, IV often drops sharply. This crush reduces premiums even if the underlying moves in your direction.
Be specific about your time horizon. Silver can be volatile intraday but stable over a week. Match your strategy and strike selection to your actual holding period.
Use the SILVERM option chain chart over multiple days. This helps identify whether support or resistance at key strikes is holding. Consistent put OI buildup at a strike indicates where participants see value.
Avoid treating SILVERM PCR as a standalone signal. It is one input in a broader assessment. The context around why the ratio shifted changes its meaning.
Closing note
Check strike-wise OI before you enter. Heavy OI at a strike often acts as support or resistance. It also shows the market price volatility.
Use the 5kg lot size to fine-tune your exposure. You can scale positions in smaller steps than the standard contract. Match your lot count to your capital. Set stop loss and target levels based on where OI clusters.
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