Saturday, April 29, 2006

 

A Look At The Silver ETF

Here is some information on the new silver ETF. "A silver-exchange traded fund launched on the American Stock Exchange Friday finished with a volume of 2.342 million shares on its first day, reported the American Stock Exchange. The closing price for the iShares Silver Trust was $138.12, which was up from an opening of $129."

"The ETF is designed to allow investors to buy or sell shares similar to a stock, except the ETF closely tracks the day-to-day movement of the commodity. It trades under the symbol SLV."

"Total shares outstanding, ounces of metal in the trust and other data will be posted on a regular basis at the Web site www.ishares.com, as is the case for the iShares Comex Gold Trust. While Barclays is the trust sponsor, the Bank of New York is the trustee. J.P. Morgan Chase Bank N.A., acting through its London branch, is custodian."

Additional info from (WARNING!) the PDF file prospectus, which doesn't allow copy and paste, apparently. The trust allows investors to place market, limit, or stop-loss orders. It can be shorted, even on a down-tick.

The sponsors fee accrues daily, is paid monthly in arrears and is calculated at an annualized rate of .50% the net asset value. There is no index. It is set up as a grantors trust. It is not a derivative. Shareholders will not receive a 1099. The trust will forward a letter with information on calculating pro-rata shares of income and expenses.

Comments:
I did not buy any SLV, but it had a good start,up a little over 7%.We have a long,long way to go in the metals market, but us long time bullion holders have been battening down the hatches for this storm for quite sometime. Hang in there guys!
 
we should point out, CEF is a gold and silver ETF too.

I wonder if anyone will use the gold/silver ratios to trade GLD(or IAU) vs. SLV?
 
wmbz, do you know how CEF is taxed in the US? Is it also 28% like SLV, or is it taxed like stock?
 
Bought some SLV for my IRA & Regular account at 135/share. I also own CEF which I started accumulating at 5.40. I still think that we will be seeing a consolidation period that will scare the short term investor, but over the long run, metals have tremendous upside still.

By the way, lots of good tax info on CEF on the yahoo stock message board (that question has been posted there) or go to centralfund.com
 
pxCEF has been one of my best picks in the last 6 months, its taxed at 15%. Was going to buy but thought there would be too much speculation. $8 later...oh well. Much more movement to go.
 
This comment has been removed by a blog administrator.
 
What's the minimum requirements for getting in? I'm not wanting to get in, but I want to see how small one can go in paper silver to start with, and how easy it can be to get in. I'm sticking with physical.

Stephanie
www.deafdrummer.org
 
If the link works, here is the iShares site.
 
2.342 million shares traded, yet there was only 150K shares (1.5 million oz) worth of silver initially deposited. Looks like they'll be needing a lot more silver!
 
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SLV and a Roth IRA

Question: If I buy and profit from SLV in my ROTH IRA, will I have to pay the 28% tax when I cash out as an old man, or will any gain be tax free just as any stock gain in a Roth IRA is?

Thanks
 
Sorry for the delay; I haven't been able to get blogger to work this afternoon. Please check back.
 
http://www.ishares.com/fund_info/detail.jhtml;?symbol=SLV

says there are
20,999,769 oz of silver
&
2,100,000 shares outstanding
 
Gang, I got this on a report I read every week. It has to do with the fact
that the Silver ETF already has 20 million ounces of silver on hand to back
up the 2+ million shares of the ETF sold thus far. Check out what MIGHT
happen if Barclays keeps buying silver to back up the ETF's.

-------------------------------------
Silver ETF & Bolivia Confiscation

Silver Stock Report
5-2-2006
by Jason Hommel

Silver ETF

As of the close of business on Friday 4-28-06, the Barclays iShares Silver
Trust ETF (Trading symbol: SLV) had nearly 21 million ounces of silver, up
from 1.5 million ounces of silver when it started trading Friday morning. Â
The Silver ETF (SLV) continues to be priced slightly higher than silver
bullion spot prices; at present the ETF is at about $14.27/oz., (minus half
of 1% annual fees and other expenses), while silver is at $14.18/oz. Â This
spread, driven by market created demand for the ETF, creates the arbitrage
incentive for the Silver ETF market makers to buy physical silver, in lots of
about 500,000 oz. for 50,000 ETF shares, for the trust. Â Twenty million
ounces is a shocking increase in the amount of silver purchased in a single
day, and at this rate, the Trust could obtain about 100 million ounces of
silver by Friday this week, and by next week, we might see a default on
delivery of silver via NYMEX futures contracts! Â Silver moved up over $1/oz.
on Friday, up again about $.50/oz. on Monday and up another $.20/oz. Tuesday.

iShares Silver Trust
http://www.ishares.com/fund_info/detail.jhtml?symbol=SLV

Frequently Asked Questions about the Silver ETF
http://www.ishares.com/material_download.jhtml?relativePath=/repository/material/downloads/silver_faq.pdf

I do not personally recommend that small, individual investors buy the Silver
ETF. Â I personally believe it is safer to own your own physical silver
bullion, which you should own in case of brokerage house default, or if the
markets simply stop trading for a year due to war or market meltdown. I
believe the ETF is primarily for large institutional investors, who simply
cannot personally move very large quantities of silver bullion that they
would like to buy for investment purposes. If the price of silver
stabilizes in about a month (or if market defaults on futures contracts do
not take place), the Silver ETF may also be useful for large trading accounts
such as IRA accounts, where it may be useful to trade into silver, instead of
cash, to hold while deciding what other silver stocks to buy.

See my Brief Guide to Buying Silver:
What kind of silver, and where to get it.
http://www.silverstockreport.com/buybullion.htm
----------------------------------

Stephanie Ellison
ww.deafdrummer.org
 
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