Pip Value & Contract Specifications
Silver (XAG/USD) has a contract size of 5,000 troy ounces per standard lot — fifty times larger than gold's 100 oz. One pip = $0.01 (one cent of silver price movement). With 5,000 oz per lot, the pip value is $50.00 per standard lot. This is by far the largest per-pip dollar value of any mainstream retail trading instrument, making position sizing critically important — especially for Indian traders managing accounts denominated in rupees.
| Lot Size | Contract (oz) | Pip value (USD) | Pip value (INR @ 84.00) | 20-pip stop loss |
|---|---|---|---|---|
| 0.01 (micro) | 50 | $0.50 | ₹42.00 | ~₹840 |
| 0.10 (mini) | 500 | $5.00 | ₹420.00 | ~₹8,400 |
| 0.50 | 2,500 | $25.00 | ₹2,100.00 | ~₹42,000 |
| 1.00 (standard) | 5,000 | $50.00 | ₹4,200.00 | ~₹84,000 |
INR values illustrative at USD/INR 84.00. Even a 0.01 micro-lot = $0.50/pip. Use the calculator above for live rates.
Position Sizing Example
Suppose you have a ₹2,00,000 account and risk 1% per trade (₹2,000). You set a 20-pip stop loss on XAG/USD — silver can cover 20 pips in a matter of minutes, so this is already an aggressive target.
At USD/INR 84.00, pip value per lot = ₹4,200. The formula:
Lots = Risk ÷ (Stop pips × Pip value in INR)
Lots = ₹2,000 ÷ (20 × ₹4,200) = ₹2,000 ÷ ₹84,000 ≈ 0.024 lots
Round down to 0.02 lots (2 micro-lots). Keep in mind: 0.02 lots of silver still moves ₹84 per pip. A sudden 50-pip spike — very common in silver — equals ₹4,200 loss, representing over 2% of the account. Silver demands the most conservative position sizing of any mainstream instrument available to traders.
About XAG/USD — Key Drivers & Trading Hours
Silver is often described as "gold on steroids" — it broadly tracks gold's direction but with significantly amplified price swings. Unlike gold, silver has substantial industrial applications including solar panels, consumer electronics, and electric vehicles. This dual nature makes it sensitive to both safe-haven flows and global manufacturing activity, giving it a unique risk profile among commodity markets.
The primary drivers of XAG/USD include: US Dollar strength (inverse relationship), gold price direction, industrial output indicators such as ISM and global PMI data, solar energy and EV adoption narratives, and mine supply dynamics from leading producers like Mexico, Peru, and China. The gold/silver ratio — typically ranging between 70 and 90 — is a closely watched metric for assessing relative value between the two metals.
Best trading hours in IST: London–New York overlap 18:30–23:00 IST, coinciding with the most liquid window for precious metals globally. Liquidity in silver is considerably thinner than gold throughout the day, which means spreads are typically 2–5x wider. Indian traders should exercise particular caution with overnight positions — silver gaps are frequent and can easily span 30–50 pips or more between sessions.
Warning: At $50/pip per standard lot, even 0.01 lots = $0.50/pip. A 100-pip daily move — entirely routine for silver — on just 0.01 lots equals $50 (roughly ₹4,200). Never trade silver without running the numbers through a position-size calculator first. Silver is the single instrument most associated with retail account blow-ups caused by over-sizing.
Pip values sourced from ECB reference data (Frankfurter API). All values are indicative and for educational purposes — not live trading quotes. See full pip value table →