CME Group Inc. (CME:US), the owner of the world’s biggest futures exchange, is betting that increased demand for silver will drive trading for a smaller version of its two futures contracts linked to the metal.
The new contract will allow for physical delivery of 1,000 ounces starting in June, Chicago-based CME said today in a statement. The company’s Comex unit in New York already offers a 5,000-ounce contract that has physical delivery and a 2,500- ounce contract settled in cash.
Related story: Silver Slump Splits Hedge Funds From Ingot Hoarders
“The smaller size will provide market participants with greater flexibility to manage their silver-price risk and serve as a more cost-effective tool for individual investors or others looking to hedge against economic uncertainty,” Robert Ray, a managing director, said in the statement.
A 1,000-ounce contract is traded on NYSE Liffe U.S., a competing exchange.
To contact the reporters on this story: Debarati Roy in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Patrick McKiernan at email@example.com