Futures exchange to offer contracts for silver

The Shanghai Futures Exchange received regulatory approval on Wednesday to start trading in silver contracts, giving Chinese investors a new way to bet on the precious metal.

The lot size of the contracts was set at 15 kilograms and the lot prices will be allowed to fluctuate by 5 percent a day. The margin requirement was set at 7 percent and prices will be quoted in yuan. The minimum amount the prices will be allowed to fluctuate was set at 1 yuan (16 US cents).

The silver contracts are the first of their type to be offered in China. Before, investors had to use Shanghai Gold Exchange Ag (T+D) contracts to conduct certain transactions of the metal. They could also go to commercial banks to buy paper silver, which don't have to be delivered physically.