Silver 5000 oz is a futures contract that represents the right to purchase or sell 5,000 troy ounces of silver at a predetermined price on a future date. Silver 5000 oz is traded on the Comex division of the Chicago Mercantile Exchange (CME).
The processing of silver 5000 oz involves the following steps:
1. Delivery: When a silver 5000 oz contract matures, the buyer is required to accept delivery of the silver. The silver can be delivered in the form of physical bars or coins.
2. Refining: If the silver is delivered in the form of physical bars or coins, it must be refined to meet the Comex quality standards. The refining process involves removing any impurities from the silver.
Comex-approved refiners use various methods to refine silver. One common method is electrorefining.
In electrorefining, the silver is placed in an electrolytic bath and an electric current is passed through the bath. This causes the silver to dissolve into the electrolyte. The impurities in the silver do not dissolve and are left behind.
Another common technique is fire assay. In this step, the silver is melted and heated to a high temperature. This causes the impurities in the silver to oxidize and form slag. The residue is removed from the silver.
3. Storage: The refined silver is stored in a Comex-approved warehouse. The warehouse must meet certain security and insurance requirements.
4. Shipment: When the buyer of the silver 5000 oz contract wishes to take possession of the silver, it must be shipped to them from the Comex-approved warehouse.
Additionally, the shipping process is handled by a Comex-approved shipper.