Following the restrictions by Robinhood and other brokerages, WallStreetBets put its sights on something else entirely — silver.
Take a look at Aberdeen Standard Physical Silver Shares (SIVR) ETF. If the WSB crowd can affect silver, others stand to gain, including iShares Silver Trust (NYSEARCA:SLV) and the Aberdeen Standard Physical Silver Shares ETF (NYSEARCA:SIVR).
If you follow the action on r/wallstreetbets, they’re calling this the next short squeeze. Can’t stay out of the action? Read on and learn how to purchase SIVR yourself.
How to Buy the Aberdeen Standard Physical Silver Shares (SIVR) ETF
First time investing? We’ve got you covered. Here’s what you need to do.
- Pick a Brokerage
You want a brokerage that fits your needs. The trickiest part is that you’ll find so many brokerages to choose from, and all of them offer something different! Let’s break it down and make it easy for you.
Ask yourself 4 things:
1.- Does this brokerage charge a commission?
2.- Which types of investors usually invest with this brokerage?
3.- What markets does it cover?
4.- Does it offer research tools?
- Decide How Many Shares You Want
Once you’ve opened and funded your brokerage account, it’s time to choose the number of shares of SIVR you want to buy. This simply comes down to how much money you’re willing to risk.
Take the amount you wish to invest and divide that by the target stock price.
For instance, let’s say you want to invest $1,000 of shares that cost $1. You can secure 1,000 shares with $1,000: ($1,000/$1.00 = $1,000). Simple math problem, but you get the idea. Some brokerages allow you to purchase fractional shares (part of a share).
- Choose Your Order Type
Next, decide what type of order to use when making this purchase. Choosing your order type gives you much more control over your risk and the trade overall. Here are some of the more common order types and what they mean.
The bid price is the highest price that a buyer is willing to pay for a stock or ETF.
The ask price is the lowest price that a seller is willing to accept for a stock or ETF.
The difference between the ask price and the bid price is known as the spread. Large-cap stocks (companies with a market capitalization value of more than $10 billion) usually have a low spread, while small-cap stocks (companies with a market capitalization of between $300 million and $2 billion) usually have a wider spread.
A limit order tells your broker to buy or sell a stock or ETF at a specific price point or better. Let’s say you place a limit order for $25. The order will only execute if the price is $25 or below.
A market order tells your broker to buy or sell a stock or ETF immediately at the current market price. It will execute right away but offers no guarantees on the price you’ll pay. Use this order type when you need speed on your side.
A stop-loss order tells your broker to sell a stock or ETF if it falls to a certain price. Let’s say you prefer to buy an ETF at $25 per share and set a stop-loss order for $24.45. Therefore, if the ETF in question falls to $24.45, your broker will sell your shares. Placing a stop-loss order helps protect you from losing more money than you feel comfortable losing.
A stop-limit order functions similarly to stop-loss orders but with an extra layer of protection. You can specify your minimum acceptable exit position. This prevents your position from exiting at a crushingly low price and could still give you a bounce back.
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SIVR ETF History
The Aberdeen Standard Physical Silver Shares (SIVR) ETF tracks the price of physical silver bullion (Silver ETPs). Investing in a silver ETF is one of the most cost-effective ways to make an investment in silver. (After all, who wants to mess with transporting and storing the real thing?)
SIVR doesn’t give you an exact equivalent of an investment in silver but offers you a way to tackle silver investments in the securities market. Silver could be a great addition to your portfolio because it’s a known safe haven during times of market uncertainty.
- 37.25%: 1-year daily total return of SIVR
- 12.78%: 3-year daily total return of SIVR
Pros to Buying SIVR
Silver is mostly used as an inflation hedge or protection against volatile equities. In addition, silver claims status as (but not limited to):
- One of the best conductors of electricity and heat
- One of the most light-sensitive metals in the world
- A component in solar panels and batteries
- A means to purifying water
- Part of control rods in nuclear reactors
As the influence of Reddit group WallStreetBets continues to sweep throughout the market, you can see SIVR benefiting. Keep tabs on these exciting developments on Benzinga.
Cons to Buying SLV
If you are planning on buying SLV, you’ll take a risk on an ETF that has risen in popularity and price — and some traders are bullish on silver's near-term prospects, with some forecasting gains of up to 30%.
But will it last? If the sentiment reverses or shifts into a different area of the market, the price of SIRV could decline. However, since this is an exchange-traded fund (ETF) instead of a stock, it should be less risky than most of the other r/wallstreetbets ideas in the hopper.
Watch the Squeezes and Beware
While you can certainly point to risks due to WallStreetBets’ potentially not-so-credible ideas, Aberdeen Standard Physical Silver Shares (SIVR) ETF may prove to be an excellent way to take part in the r/wallstreetbets party and also hedge against inflation.
Just remember, only invest what you’re willing to lose.