US global exchanges and clearing houses operator Intercontinental Exchange is launching a London silver daily futures contract in September.
It says that its ICE Futures US subsidiary plans to launch a new London silver daily futures contract on 5 September. This is subject to regulatory review.
The contract will be physically settled, says ICE. It will be traded in one-half US cent ($0.005) per ounce increments. The contract calls for delivery of 5,000 fine troy ounces of silver. The quality of the silver must satisfy LBMA good delivery rules.
Follows LBMA silver price auction news
ICE adds that the launch of the contract follows recent relevant news about ICE Benchmark Administration (IBA). It has been appointed to act as the new administrator for the LBMA silver price auction. This is expected to start this autumn.
ICE says that the new contract will enable participants in the LBMA silver price auction to exchange auction positions for cleared futures contracts held with ICE Clear US. This is consistent with LBMA gold auction positions, it notes.
ICE adds that this will help open the silver auction to a broader cross-section of market participants. It will also boost volume, it says.The contract will trade alongside ICE’s gold daily futures contract and the monthly gold and silver futures and option contracts.
A new tool for market participants
Trabue Bland, ICE Futures US CEO, courtesy of ICE
“The contract offers market participants a new tool for managing their positions and implementing investment strategies in the London silver market,” said Trabue Bland, the current president of ICE Futures US.
Customers can elect to trade through ICE’s central limit order book or to clear trades resulting from the LBMA silver price auction. Whichever option they choose, Bland believes that the new futures will expand participation.
They have other qualitative advantages too, he adds. They will enhance price discovery and risk management in the silver market.