What is a Silver Exchange?

A silver exchange is a venue for trading silver. As a precious metal, silver is a commodity that can be traded in various ways. An exchange is simply a market, and “silver exchanges” range from large commodities exchanges that include silver equities, to small independent metals exchanges that may or may not focus on trading commodities in general.

Experienced financial professionals might talk about a “silver exchange” or “silver market.” They may be referring to an exchange or market that trades a range of commodities, or one that trades only precious metals like gold and silver. Traders and others will also look at precisely how silver is traded over global, national, or local exchanges. For example, silver can be traded in its raw form as bullion, or in coins or other collectible forms.

It’s important to distinguish the nature of a silver exchange from some new innovative products that are also much talked about as ways to trade silver and precious metals. Silver exchange traded funds (ETFs) and silver exchange traded notes (ETNs) are not sold on “silver exchanges,” but over national and larger exchanges. Silver ETFs and ETNs represent a way to engage in buying and selling forms of this commodity through a major exchange, where standards of regulation apply. Many finance pros are excited about the use of these funds to effectively trade silver, gold, and other precious metals.

Although true silver exchanges are commodity exchanges set up legitimately to handle precious metals, in the recent past, the use of the term “silver exchange” has blossomed into a term for many different regional and local markets. Some of these may only be single dealers who are set up to help individuals trade precious metals. In some cases, those who are using the term “silver exchange” are not set up to trade precious metals on markets, but instead pay cash for individuals surrendering silver and other precious metals in any form. Investors should know that though these may be exchanges in a technical sense, they are not the same as established markets for silver that include more oversight by a government presiding over the national or larger exchanges.

Any kind of true silver exchange allows for buying and selling precious metals in the form of equities. Investors can choose to buy bullion, or invest in mining operations. They can also choose index funds that bundle silver equities. A professional money manager can help beginners choose the right silver opportunities for their portfolios.