Silver futures on India's Multi Commodity Exchange saw a dramatic 10% swing in a single trading day, showing both big profit chances and big risks.
What Happened on the MCX?
On the day, March silver futures jumped to a record ₹2,54,174 per kilogram. Within an hour, the price fell sharply to ₹2,33,120, erasing earlier gains.
Why Did Prices Reverse?
- Geopolitical tensions eased, reducing safe‑haven buying.
- U.S. margin requirements for leveraged positions were raised, forcing many traders to close or cut positions.
- Higher margins increased the cost of holding large bets, adding to the sell‑off.
Key Lesson From Zerodha’s Founder
Kamath, the founder of Zerodha, warned that even if you guess the market direction right most of the time, a single oversized trade can wipe you out. Proper position sizing and risk discipline are essential, especially when markets move fast.
What Traders Should Watch
- Keep positions small enough to survive sudden moves.
- Watch margin changes on major exchanges that can trigger rapid selling.
- Monitor broader factors like geopolitical news that affect safe‑haven demand.
Takeaway
Silver’s sharp rally and quick pull‑back underline a growing trend: more traders are entering commodity markets, but higher participation also means more volatile price action. Those who manage risk well can find opportunities; those who don’t may face big losses.
Remember, this is just an overview, not a prediction. Do your own research before making any trade decisions.