Investing in junk silver, or silver coins (dimes, quarters and half-dollars) minted before 1965, is an interesting way to ride the ever increasing commodity prices of precious metals due to market demand or loss of purchasing power of the dollar. Trading junk silver on eBay gives you a quick easy way to accumulate or liquidate silver as the price fluctuates; however, when purchasing junk silver, be aware that misleading listing descriptions may result in over inflated silver prices when bidding on items.
The first thing you really need to know is how much silver is in junk coins. Excluding silver dollars, where silver dollar values are higher due to higher silver content, junk silver coins when they first were minted contained .7234 ounces of silver per dollar. Due to circulation the content decreases with wear, thus a standard was set by Coin Dealers at .715 ounces of silver per dollar.
When bidding on junk silver, you will see listings in units of dollars or in units of ounces. To determine the silver price you are bidding on, simply take the face dollar amount of the silver coins, multiple by .715, and then multiple by the spot price of silver.
Some eBay listings will have the item in units of ounces. If you carefully read the listing, it will state that the coins are nearly uncirculated demanding higher silver content or have a conversion error in Troy ounces vs. U.S. ounces. Often the bid will be on a face value of $1.30 worth of junk silver per ounce when the true standard set long ago is a face value of $1.40 junk silver per ounce.
Try to keep you maximum bid as close to spot price scaled for the amount of silver you are purchasing. A five percent markup in trading costs is not uncommon so try to limit your bid below that margin. Also, look for lower shipping costs especially if you only buy a face value of $1 worth of junk silver since the coins can be shipped first class for fewer than fifty cents.
Should You Invest in Junk Silver on eBay?