How do buyers determiine "Paying X Face Value"?

Durmex

Found an OLD receipt, dated 5/30/98
Silver was at $5.07
Dealer was paying 3.4 x Face
On silver dollars, this would be 67% of Spot or 87% of silver content
($5.07 x .77 =$3.90)
87% x $3.90

Seem like "odd' %'s.
What am I missing?What are they paying now?

blu62vette

Melt now is 31.1 on 90% a little higher on dollars.

Dealers are paying 29 - 29.5.

coinflation.com calculates this for you.

TheBigB

Normally "Paying X Face Value" is not for silver dollars as they have more silver content than smaller denominations based on face value.

DennisH

There's also more re-sale demand for dollars than other denominations.

coindeuce

The seller who generated that 1998 receipt was likely using a formula that looked like this:
spot market price($5.07) X .675 = 3.42, where .675 represented the expected weight in troy ounces of pure silver per dollar face of 90% coinage.

The purchase could have represented a buy of very low grade dimes, which often are heavily discounted for weight by the simple fact that they often sustained much heavier use/wear in commerce than quarters and halfs. Could have been a judgement call. The typical range for the weight factor is .685 to .720, with .720 representing BU quarters/dimes most often. The weight factor can be fixed also, with premiums or discounts to the spot market price used as an adjustment for the material presented or market conditions.

DaveG

Very possibly your buyer was using the buy price of the guy he was going to sell to, less his desired profit margin.

fcloud

A percentage x face. Each dealer is different in what they pay. Keep in mind they need to have some profit to keep in business.

Here are some examples of how it might be figured at what percentage:

Melt @ $42.00
$42 x 0.60 = $25.20 per face dollar
$42 x 0.65 = $27.50 per face dollar
$42 x 0.70 = $29.40 per face dollar
$42 x 0.75 = $31.50 per face dollar

Melt value @ 42.00
$42 x 0.77344 = $32.48 per face dollar

PerryHall

Typically, a dollar face value of 900 fine circulated silver has 0.715 Troy ounces of pure silver. Multiply that times the current spot which is $43.05 to get a multiplier for your face value which is currently $30.85. Some dealers will pay a little less and others want to rip it for a lot less. You need to shop around for the best price or decide what you need to get for it and then offer it for sale on the BST.

CoinCoins

spot x .7234

spot x .77344 for silver dollars



then they knock off whatever they want so they can make money reselling it


it's that simple

greatnortherncoin

want to deal with the most smart mouthed people on earth ? be a coin dealer

PerryHall

<< <i>spot x .7234

spot x .77344 for silver dollars >>



Those numbers only apply to Mint State coins. Dealers typically use 0.715 (dimes, quarters, & halves) and 0.77 (dollars) for average circulated coins.

notwilight

There are lots of different ways to do it and additional complication is that the amount of silver is a silver dollar is slightly more per $1 face than other denominations. some of the replies to this thread addressed dollars, some addressed non-dollar denominations and some addressed both. You really need to understand thoroughly to understand all the different methods presented and some of the replies so far seem to be slightly in error.

I like the coinflation.com method of calculating it.

Go to their silver calculator, put in 2 halves, 4 quarters, or 10 dimes and it will calculate what spot is in X times face. So if it comes out 31X face, and someone offers you 29x face, then they are paying 29/31 of spot. But this is really an irrelevant intellectual exercise and is not how 90% is traded.

The multiplier has nothing to do with spot. It is all supply and demand. When I post a buy on the BST at 29X face, that is just what the market is and has nothing to do with current spot. As spot goes up, the market follows it but not in a direct mathematical correlation. Sometimes the buy is closer to spot and somtimes it is further back. Just like silver bars. Sometimes they trade above spot and sometimes slightly below spot.

I do have people, even dealers, calling me saying "will you buy these at spot" and I say "My buy price is ??x face which is a little less than spot but is what the market is". Often it results in a long discussion to try to convince them I'm paying fairly.

Right now I would pay 29x face for 90% silver and 30x face for silver dollars and commems.

--Jerry

Durmex

Some really good replies and they are appreciated !!!