The Silver Low, Your Silver
Phillip Futures Sdn Bhd
Business Development Executive
12 June 2013
The information contained in these course materials provided contain information of a
general nature only and are produced for investor education purposes only.
They do not constitute investment advice in any manner whatsoever or have any
regard to the specific investment objectives, financial situation or individual needs of
any particular person receiving them.
Examples are used for illustrative purposes only and do not constitute investment
Phillip Futures makes no guarantee, warranties and representations of any kind
whatsoever, express or implied, including but not limited to, the accuracy,
completeness, merchantability, or fitness for any particular purpose, of such
information or as to the results obtained by any person from the use of any
information or any financial instrument mentioned in the course materials.
There is a substantial risk of loss in trading futures and options, and may not be
suitable for all types of investors.
The above examples were simplified trading illustrations and do not take into account
transaction costs such as brokerage commission. Additionally, the margin amounts are
only indicative as they are subject to historical and prevalent market volatility.
QE to End this Year
Slowing Down Money Printing?
• Chairman Ben S. Bernanke will probably reduce the Federal Reserve’s
monthly bond buying in the fourth quarter to $50 billion from $85
billion as he begins to unwind record stimulus.
• The third round of quantitative easing will total $1.18 trillion. So far the
purchases have pushed the Fed’s balance sheet to a record $3.32 trillion.
Federal Reserve Monetary Base
Subprime Crisis 2008
China’s Federal Reserve Money Supply
Japan’s Federal Reserve Money Supply
Japan's latest stimulus: What it means
and will it work?
• Central Bank of Japan will increase its purchase of government bonds by
50 trillion yen ($520bn; £350bn) per year. 10% of Japan's annual GDP.
• The main idea behind these bond purchases is to keep long term interest
• This is to try to encourage businesses
and consumers to borrow more money.
• Or the money doesn’t flow through
the real economy like it should,
Japan’s Initiative for Clean
• Dowa Holdings Co. (5714), Japan’s biggest silver producer, will raise
output 40 percent this year to meet solar-cell demand after the 2011
Fukushima disaster crippled a nuclear power plant and sent fossil fuel
• The country had 26,940 megawatts of clean energy capability at the end
of 2012, according to BNEF. Solar accounts for about a third of all
renewable energy, according to the data.
Physical Silver Still in Demand
( oz. / #coins )
2013 Silver Eagles Sales Totals (in ounces / number of coins)
Why Silver? Gold to Silver Ratio
For every 1 oz of gold, 10 oz of silver is mined.
American Silver Eagles
• Sales of American Eagle silver coins in May have dropped 15 percent from
the full month of April, according to data on the mint’s website. Sales
jumped to a monthly record in January, and the mint suspended business
for a week because of a lack of inventory.
• Silver futures have tumbled 26 percent this year, the most among 24 raw
materials tracked by the Standard & Poor’s GSCI Spot Index. The
commodity slumped into a bear market on April 1, partly on concern that
industrial demand would ebb.
What is Futures?
In short: A standardized contract with predetermined future date
and price with obligation to proceed.
Difference of Stocks & Futures
Part ownership in the
Entering into a contract. A contract to
purchase the underlying commodity
at a certain price in the future.
Capital To pay full amount 100% 5%-20% of the full contract value
Position Initiate buy position only Initiate Buy/Sell
Bursa Malaysia Stock
Exchange Bursa Malaysia Derivatives
Why Trade TOCOM Silver
• Low initial margin (RM4000) to start.
• Japanese currency now in devaluation
• Leverage on a full contract
• Hedge against temporary falling prices of
• High volume futures Product, high volatility
• Different trading time zone
• Trading Hours
• Day Session 9:00 a.m. to 3:30 p.m. (JST)
Night Session 5:00 p.m. to to 4:00 a.m. (JST)
• Contract Unit
• 10 kg / contract(approximately 321.51 troy ounces)
• Delivery Unit
• 30 kg (Delivery unit = 3 contract units)
• Price Increment
• JPY 0.1 per 1 gram