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Still kind of new to all of this PM trading but me and 2 buddies took the plunge and got our first monster box ordered. I really like the idea of physical "in my hands" but also want a good way to be able to "easily take some profits" if I feel the market is over done. So my opinion is physical is good for some long term but I had been looking for a way to do some paper trading without using the 5000 or 1000oz futures contracts.

Today I ran across Ishares Silver Trust that is traded on the NYSE under SLV. At first glance, I think this is the way to go to be able to get in and out a few times a year if the opportunity arises.

Looking for input from those of you who are trading this. Seems to have boat loads of volume and 1 share = 1 oz so there we go!

Still a little baffled by one of my financial advisers ideas about how to avoid taxes when doing trading with physical. He said that as long as the transaction wasn't over $10k, it wasn't reported. I haven't been able to confirm this but if it is the case it may be worth looking into more. That would be a huge advantage for physical over paper. In the end uncle sam always gets his share so I that's not one of my priorities at this point.

Keep in mind, profits in SLV get taxed at the "collectable" level.


If you are primarily trading the paper, look into AGQ (for the way up), and ZSL (for the way down)

Silver Addict wrote:Keep in mind, profits in SLV get taxed at the "collectable" level.


If you are primarily trading the paper, look into AGQ (for the way up), and ZSL (for the way down)

What is "collectable level"? I've never heard of that and I don't believe it to be the case. SLV should be taxed the same way as any other ETF you hold or sell would be.


Edit: Naturally short term sales are taxed differently than long term holds. Everyone knows that.

SLV gains or losses are treated as collectibles. Don't take our word for it. A one minute Google search will verify this.

Hm, you are right. Interesting and nonsensical.

Thanks for the clarification and I admit being incorrect.

That does reduce the effectiveness of using them long term. Still, that would not be different than holding silver naturally (physical) which would always be taxed at the maximum rate as well.

So SLV vs. physical silver still has the benefits you described, albeit without the tax savings of long term gains that is normally there.

Just buy in a qualified retirement account - ie roth, 401k etc

If you are primarily trading the paper, look into AGQ (for the way up), and ZSL (for the way down)[/quote]
Thanks for the ideas but is there anything that tracks the price of silver a little closer than these that are tax friendly??

I would recommend buying a Silver Futures Contract. It represents 5000 ounces of silver, and you can get a $100 instant rebate by opening a new account with MF Global.

cupronickel wrote:I would recommend buying a Silver Futures Contract. It represents 5000 ounces of silver, and you can get a $100 instant rebate by opening a new account with MF Global.

Do you have a link for this offer? I'd love to jump on that offer.

cupronickel wrote:I would recommend buying a Silver Futures Contract. It represents 5000 ounces of silver, and you can get a $100 instant rebate by opening a new account with MF Global.

I think you're getting your chain yanked my friend.

I wrote an article on precious metal etfs recently. Might help clarify a few things, or confuse you even more. Most of the ETFs are actually trading futures contracts, no metal involved. Others are buying mining companies - businesses that happen to involve looking for metal - again not metal itself. There are even bull and bear, double leverage funds. And the madness continues.

Jade Dragon,

Nice article. It lays out the essentials very clearly. Thanks for sharing it.

That was interesting JadeDragon, thanks.

Do you have any opinions on which are more "tax friendly" than some of the others? We are in a situation where we are considering opening up a business but don't have all the pieces put together yet. As part of my "diversification plan", I would like to stick around $15-20k in metals for maybe up to 5 years or so. I have considered coins or bullion but would also consider some paper. One of my main concerns is having access to the investments if needed and since I am only 36, feel I need to keep them out of a retirement type account, but also want the most "tax friendly" scenario. There has been some comments on here about a higher tax rate since some of these are looked at as a collectible. I have been trying to read up on this but it still isn't perfectly clear. In the end, I may just end up with all physical unless I can find the right paper scenario.

JadeDragon wrote:I wrote an article on precious metal etfs recently. Might help clarify a few things, or confuse you even more. Most of the ETFs are actually trading futures contracts, no metal involved. Others are buying mining companies - businesses that happen to involve looking for metal - again not metal itself. There are even bull and bear, double leverage funds. And the madness continues.

http://etfdb.com/etf/DSLV/

3X inverse silver anyone

Oakair wrote:

JadeDragon wrote:I wrote an article on precious metal etfs recently. Might help clarify a few things, or confuse you even more. Most of the ETFs are actually trading futures contracts, no metal involved. Others are buying mining companies - businesses that happen to involve looking for metal - again not metal itself. There are even bull and bear, double leverage funds. And the madness continues.

http://etfdb.com/etf/DSLV/

3X inverse silver anyone

Dangerous counterparty risk. Also this fund will suffer from long term contango roll wipeout- even if silver declines you'll lose some or all of your investment.

Cheers!

Jonflyfish wrote:Dangerous counterparty risk. Also this fund will suffer from long term contango roll wipeout- even if silver declines you'll lose some or all of your investment.

Cheers!

Yeah. Look at chart for ZSL and compare to SLV silver prices for same period. A perfect example would be the one year period that has just elapsed. Silver has essentially stayed flat in price but ZSL has lost over 60% in price. These inverse ETFs you daytrade. They are not buy and hold candidates unless the trends are on your side.

JerrySpringer wrote:

Jonflyfish wrote:Dangerous counterparty risk. Also this fund will suffer from long term contango roll wipeout- even if silver declines you'll lose some or all of your investment.

Cheers!

Yeah. Look at chart for ZSL and compare to SLV silver prices for same period. A perfect example would be the one year period that has just elapsed. Silver has essentially stayed flat in price but ZSL has lost over 60% in price. These inverse ETFs you daytrade. They are not buy and hold candidates unless the trends are on your side.

Yes intraday only regardless of trend. ETN's matching prompt contracts are financial suicide long term. Think UNG. Contango black hole. Poorly constructed and improperly implemented instruments.

Cheers!