A bullion premium is the amount paid above the metal's spot value. For example, if silver spot is $28 per ounce and a one-ounce silver coin costs $33, the premium is $5 per ounce. That premium reflects production costs, mint demand, dealer inventory, logistics, and product popularity.

Premiums matter because they affect the stacker's break-even point. A person who pays a very high premium may need the spot price to rise significantly before the position is profitable. This is especially important with silver because percentage premiums on small retail silver products are often much higher than premiums on larger gold products.

Stackers should compare premiums across sovereign coins, private rounds, bars, and junk silver before buying. A beautiful coin is not automatically a good stacking purchase if the premium is too high relative to its resale value.