Silver Exchanges

• Silver trades on a number of exchanges around the world, including the London Bullion Market Association (LBMA), the New York Mercantile Exchange, Tokyo Commodity Exchange and the Australian Securities Exchange.
  
  

Setting the Price

• Each exchange has a method by which the most important silver-trading members of the exchange arrive at a fixed price for silver once a day, in U.S. dollars and other currencies per troy ounce of silver. On the LBMA, often considered the most important benchmark of this international price of silver, this is known as the London Silver Fixing.
  
  

Ask vs. Bid

• Once the price is fixed, that datum serves as the basis for the spot price. A spot price is either "ask" (the price when one buys) or "bid" (the price when one sells); both are widely available in real time online.
  
  

Institutional vs. Smaller Investors

• Generally speaking, only large amounts of silver are traded at the exact spot price on a given day among institutional investors. Buyers and sellers of smaller quantities are typically obliged to buy at a small premium over spot or sell at a small discount under spot.
  
  

Spot as a Benchmark

• For investors in silver, the spot price is a useful benchmark, or guide, to what the final price of a particular kind of silver investment will be. But it isn't the definitive price per ounce for each sale of silver, since other factors affect the price in each individual transaction.