Mumbai: Lured by 14-18% annual risk free return, financial investors have played a key role in record silver delivery worth around Rs 800 crore on commodity bourse MCX. The figure for the September 4 expiry, 30 kilo silver futures contract excludes Friday’s delivery, which will take the value even higher.
Financial investors spotted around 2-3% premium between bi-monthly silver futures contracts traded on MCX . The trade consisted of buying the cheaper near month contract and simultaneously selling the costlier far month contract, thereby locking in prices. That is , take delivery in the near month expiry and tender the same at a higher price in the far month.
“This arbitrage trade has beaten returns on most other assets like bank FDs,” said Amit Modak, CEO, PN Gadgil and Sons.
The arbitrage is currently available between December 2020 and March 2021 silver contracts. On Friday, silver December last traded at Rs 67481 a kilo while March LTP was Rs 69740, a 3.3% premium .
India’s provisional silver import in the first half of calendar 2020 was 1217 tonnes , 63% lower from the corresponding period last year , said Debajit Saha, senior analyst, Refinitiv Metals India.
The smaller quantum silver mini and silver micro delivery for August was 12 tonnes.