Investing in Silver Futures: What Every Trader Should Know

Silver Futures: Understanding the Market and How to Start Investing

By Lyle Daly – Updated Sep 22, 2025 at 1:42 PM | Fact-checked by Frank Bass

Key Points

Silver futures are risky, leveraged contracts for future silver sales or purchases.
Investing in silver can be done via physical silver, stocks, ETFs, or futures.
Silver futures offer high potential gains but also increased risks and price volatility.

Silver futures are contracts to buy and sell silver at a fixed price at an agreed-upon date in the future. Though investors can use them to speculate on silver price movements, they're more commonly used by businesses to hedge against price fluctuations. For example, a manufacturer might buy silver futures as a hedge against price increases, or a mining company might sell futures contracts as a safeguard in case silver prices drop.

It's possible to make money off silver futures, but it's highly risky. We'll explain how silver futures work and why they generally aren't suitable for investors.

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An up-close view of a shiny one ounce silver ingot. — Image source: Getty Images.

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Silver futures profit/loss example.
Scenario	Silver Price	Contract Value	Profit/Loss
Initial Investment	$40/oz	$200,000	---
Silver Increases	$42/oz	$210,000	$10,000
Silver Decreases	$38/oz	$190,000	($10,000)

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Now, let's look at the cons of silver futures:

Leverage also increases your risk. Trading silver futures requires only a fraction of the contract’s total value upfront, but as mentioned above, this also means losses can be amplified. If you put down $5,000 to control a $100,000 contract, you could face a margin call if silver prices drop by just 5%. This means you'd either need to add more funds to keep your position open or close it at a loss, potentially losing your entire margin deposit.
Prices can swing wildly. Silver prices can be influenced by inflation, mining supply, and global economic events. Because the global silver market is only a fraction of the gold market's size, small changes in supply can lead to significant price volatility. Since it's widely used in manufacturing, prices are also sensitive to changes in industrial demand.
You need to manage expiration risk. Unlike stocks, which you can hold indefinitely, silver futures expire. If you don't close out or roll over the contract before the expiration date, you could be forced to deliver or accept delivery of 5,000 ounces of silver for a single contract, which could be a logistical nightmare.

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About the Author

Lyle Daly is a contributing Motley Fool stock market analyst covering information technology and cryptocurrency. Lyle has been a contributor at the financial services company since 2018. His work has been featured on USA Today, Yahoo Finance, MSN, Fox Business, and Nasdaq. Before joining The Motley Fool, he wrote for financial brands including Intuit.

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@LyleDaly

The Motley Fool has a disclosure policy.

Silver Futures: Understanding the Market and How to Start Investing

Key Points

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About the Author

Premium Investing Services

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How do silver futures work?

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What affects silver futures prices?

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