About.Ag's Glossary of Silver Terms

AP: - See Authorized Participant.
Authorized Participant: - For the SLV ETF, an Authorized Participant (AP) is an organization that is allowed to create shares (by depositing silver) or redeem shares (and removing silver).
Avoirdupois Ounce: - An ounce using the United States measuring system, which weighs a bit less than a troy ounce. So if you weigh silver on a 'normal' scale, it will appear to be slightly heavier than it actually is. See also Troy Ounce.
Backwardation: - In the futures market, this refers to an abnormal situation for silver and other metals, where the longer the time until delivery, the less expensive the metal is. This can occur if there are concerns that there will be a shortage of the metal, in which case if you wait a few extra months for delivery, you could find out that there isn't enough silver to go around. See also Backwardation.
Bag: - A term for $1,000 face value of 90% silver coins. The term refers to the fact that such coins typically come in a large canvas bag.
Bar: - Silver in rectangular form. See also ingot, rectangle.
Basket: - In the SLV ETF, shares are created (and redeemed) in groups of 50,000, which are called "Baskets" of shares.
Bimetalism: - A monetary policy where both gold and silver are used. Typically, gold is reserved for transactions between corporations, banks, and the wealthy, while silver is used by most people for day-to-day transaction.
Cast: - Another term for a poured bar.
COMEX: - The commodities exchange where silver futures contracts are traded in the United States.
Confiscation: - The idea that a government will not allow you to keep silver or gold. This did occur in the United States from 1933 to 1974 (few, if any, coins were actually confiscated). This did not apply to silver. See our page on confiscation.
Contango: - In the futures market, this refers to the normal situation for silver and other metals, where the longer the time until delivery, the more expensive the metal is. This is because it costs money to store the metals. See also Backwardation.
Custodian: - In the SLV ETF, the Custodian is the company (J.P. Morgan at the time of this writing) that is responsible for safeguarding the silver in the trust. See also Sponsor, Sub-Custodian, Trustee.
Demonitize: - To take away the status of a metal as money. In a bimetalism system, if silver is demonitized, then only gold is used as money (and the price of silver will then fluctuate).
Extruded: - An extruded silver bar is made by forcing silver into a die or mold. They are always the exact same shape and size. It is cheaper to create than struck bars.
Face Value: - The amount of money listed on coins. The face value determines a 'floor', or the minimum amount of money that the coins are guaranteed to be worth, even if the silver (or gold) value drops significantly. Abbreviated FV.
Fineness: - A number indicating the purity of the silver. It can be expressed in several ways; for example, '999', '.999' and '99.9%' all refer to silver that is 99.9% pure.
Free Coinage: - A monetary policy where anyone can bring silver or gold to the mint, and have it converted into coins.
Free Silver: - A monetary policy where anyone can bring silver to the mint, and have it converted into coins. In the late 1800s, many people felt that a free silver policy would benefit the economy.
Futures Contract: - An agreement to buy or sell a specific amount of silver at a set price on a specific date in the future.
FV: - See Face Value.
Gold Lease: - When someone owning gold lets someone else borrow it, on the promise that it will be returned in the future. Typically, the borrower uses the gold, and then needs to buy it back later. The risk is that the price of gold will go up, so that the borrower will lose a lot of money. This practice can be done with silver, but is less common, since there are less large stockpiles of silver.
Gold Standard: - A monetary policy where gold is used as money, either directly (using gold coins), or through currency (paper that is backed by gold owned by the government).
Gold Swap: - An arrangement where someone owning gold lets someone else borrow it, in exchange for cash, that will be returned at a later date (along with the gold). It is similar to leasing the gold, except that the party that owns the gold gets money to use until the gold is returned. This can occur with silver, but it is more common with gold (as there are larger stockpiles of gold than silver).
Good Delivery: - A term used to indicate that a silver or gold bar meets the LBMA requirements (e.g. it is from an acceptable refiner, and the weight, fineness, and shape are within limits).
GSR: - The Silver to Gold Ratio. Technically, it should be SGR (to generate a number above 1), but people say GSR and 'Gold Silver Ratio'.
Junk Silver: - A term for silver coins purchased for investment (such as $1,000 face value bags). The term implies that the coins have been picked through and none have any numismatic value (value to coin collectors).
Ingot: - Another term for a silver bar
LBMA: - London Bullion Market Association. The organization that oversees the wholesale market for gold and silver in London. Among other things, they make the rules for determining if a silver or gold bar is acceptable for 'Good Delivery'.
Loaf: - A term for a poured silver bar, that has a shape similar to a loaf of bread (it has a very rounded look to it).
Long: - In the futures market, someone who is long silver is owed silver at some point in the future. However, in most cases, the buyer simply accepts the value of the silver in cash, or 'rolls it over' to a farther distance in the future. See also short.
Melt Value: - The value of an object (silver bar, gold coin, etc.) if it were melted and the precious metals were sold at the current spot prices. For example, if you had a 1 ounce coin made of 90% pure silver (.900 fine), and the spot price of silver was $10.00, the melt value would be $9.00 (1 ounce times $10.00 times .900).
Mil: - An electroplating term meaning 1/1000". Any silver item with "Mil" or "Mills" is not made of silver! It is a base metal (perhaps lead or copper) with a nearly invisible layer of silver worth less than $.05 (with silver at under $20/ounce).
Mill: - A term for 1/1000 of a dollar (1/10 cent). The CMC Mint also incorrectly uses this term for non-silver items. See also 'Mil'.
OTC: - See Over The Counter.
Over The Counter: - This refers to silver that is bought and sold privately (usually in large quantities) between individuals (for example, if you were to call a major bullion dealer and order 100,000 ounces of silver). In most cases, this refers to speculative buying and selling where no actual silver changes hands (it sits in vaults, the buyer receives a certificate that they then give back when selling the silver).
Paper Silver: - Any type of silver that is not real. For example, the SLV ETF is considered paper silver, since you are buying shares of an ETF (you never actually see the silver, even though the ETF does hold the silver). Silver pools are also paper silver, as you just have paperwork saying that you own the silver, but you never see the real silver that may or may not be in the pool. See also Physical Silver.
Parity: - In bimetalism, parity refers to the equality of gold and silver, at a fixed ratio. For example, when the silver:gold ratio was set at 15:1 in the United States, there was parity between gold and silver (if you had 15 ounces of silver, you could use it to buy something that was worth 1 ounce of gold).
Physical Silver: - Real silver, that can be held and touched. See also Paper Silver.
PoG: - Price of Gold.
Pool: - An arrangement where you buy silver (or other precious metal) and have someone else hold it for you, where you are buying ounces of silver that are 'pooled' with other investors. In theory, the 'pool' should contain the same amount of silver as the investors have paid for, but in reality it likely never will (and in many cases, the pool may contain much less silver than it should, or none at all). One possibility is that some dealers essentially 'lease' their inventory using pools (so that they essentially get an interest-free loan to hold more silver in their inventory). Silver pools typically do not charge any annual fees (which in turn highly suggests that they do not contain any real silver)
PoS: - Price of Silver.
Poured: - A poured silver bar is made by pouring silver into a mold. The shape and size may vary slightly.
Pre-1933 Gold: - Gold coins issued before 1933 (usually referring to United States coins). This term is used to refer to coins that were apparently allowed to be owned by United States collecters in 1954. For more details, see our page on confiscation).
Rectangle: - Another word for a silver bar.
Retail Silver: - This refers to silver products that are purchased by small investors, typically any silver product 100 ounces or less. This is different from 1,000 ounce bars, which are the standard for large investments (such as settling futures contracts).
Roll Over: - In the futures market, rolling over is when you trade a contract that is about to expire for one that is not about to expire (which will expire a month or more in the future).
Short: - In the futures market, someone who is short silver promises to deliver silver (if requested by the buyer) or the price of silver (as is typically the case) at a specified time in the future. See also long.
Short Squeeze: - In the futures market, if the price of silver goes up, and many short sellers are required to deliver the silver, they have to buy the silver to honor the contract. With enough people buying silver at the same time, the price will rise, which then may cause more short sellers to have to deliver the silver, and potentially causing a large increase in the price of silver.
Silver Lease: - See Gold Lease.
Silver Pool: - See Pool.
Silver Swap: - See Gold Swap.
Specie Payment: - A government policy where paper currency can be traded for gold coin (e.g. a $20 bill could be traded for a $20 gold coin).
Sponsor: - For the SLV ETF, the Sponsor is the organization that created it and/or oversees it. As of this writing, it is iShares� Delaware Trust Sponsor LLC (owned by BlackRock). They are not responsible for the day-to-day operations (the Trustee is). See also Custodian, Trustee.
Spot Price: - The price at which silver (or gold) can be bought immediately.
Stamped: - A stamped silver bar is one that is made like a coin; the whole thing is stamped (rather than just the wording)
Standing for Delivery: - In the futures market, this is someone who has a long contract that expired, and is expecting delivery of the physical silver.
Stratregic Silver Stockpilek: - A large amount of silver that was stored by the United States from 1968 through 2001. It started at 165Moz. It was intended to be available for sale to government agencies that might need it, especially in wartime, until it was decided that it was no longer necessary, and was then used to make the American Silver Eagle coins.
Struck: - Same as stamped.
Structural Deficit: - The idea that there is more silver is being consumed (used in a way that it is very difficult to recover the silver, such as with silver plated items and many industrial uses) than is being mined, and that therefore eventually less silver needs to be used (which could take a higher price) or more would need to be mined.
Sub-Custodian: - In the SLV ETF, any organization that the Custodian uses to offload the Custodian's duties. In practice, these would be companies that operate vaults (e.g. Brinks, Johnson Matthey, Via Mat).
Troy Ounce: - The unit of measure that silver is sold in. A troy ounce (about 31.1g) weighs slightly more than an avoirdupois (traditional United States) ounce.
Trustee: - In the SLV ETF, the Trustee is the company (Bank of New York Mellon at the time of this writing) that is responsible for the day-to-day operations of the trust. See also Custodian, Sponsor.
Waffle: - A term used to describe the bottom of some silver bars (such as some early Engelhard 10 ounce bars) that have a pattern of crossed lines (that look a bit like a waffle).