What are silver certificates

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More and more investors see the possibility of investing their money in silver, as these forms of investment are considered to be very stable and secure. When investing in silver or generally in precious metals, a distinction is made between direct and indirect investments or investments in physical form and in book form. While you can, for example, purchase silver coins and silver bars as part of the physical investment in silver, investments in book form, for example, are available in stocks, CFDs or in silver certificates. In principle, the construction of the silver certificates work in such a way that the respective price of the certificate is linked to the price for a certain amount of silver. This coupling takes place in a certain ratio, for example 1:10. For example, if an ounce of silver costs 16 US dollars, the silver certificate would then have a price of 1.60 US dollars. Of course there are also silver certificates that are quoted in euros, so that the price of silver is converted from dollars to euros. The indirect investment in silver certificates has several advantages over direct investments in coins or silver bars. In addition, for certain reasons, investing in silver certificates is more of an option for many investors than investing in CFDs with an underlying silver or in so-called silver stocks.

You can acquire the silver certificates through a "normal" trading order for securities, i.e. through your bank or online broker. Silver certificates are therefore traded on the stock exchange, and an over-the-counter purchase is also possible in the course of direct trading. One of the advantages of the silver certificates is already evident here, namely the high liquidity of the product at all times. You can buy or sell your silver certificates at any time, while this can sometimes take longer with silver coins or bars. The second advantage of the certificates is the low fees that you have to pay. There are only the normal order fees for a sell or buy order. In the case of a physical investment, on the other hand, the quite large spread between the bid and ask price is charged as fees, as are the costs for custody of the precious metal. Compared to investing in CFDs, the silver certificates have the advantage that they are significantly less risky, compared to investing in silver stocks, the advantage of risk diversification is to be mentioned. The value of the silver certificate is based exclusively on the price of the silver, while with silver stocks the economic situation of the respective company naturally also plays a role and harbors additional opportunities and risks.

If you have decided to invest in silver certificates, it is also important to know that there are different forms of certificates, which can differ widely in terms of the conditions. So there is no such thing as "the" silver certificate, but you can purchase silver certificates, for example in the form of a discount certificate, a capped bonus certificate or a knock-out certificate. You have to deal precisely with the structure of the certificate type in order to be able to choose the best certificate or the best form for yourself.

All important types of certificates at a glance:

Guarantee certificates Index certificates Discount certificates Bonus certificates Leverage certificates Sprint certificates

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