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And Like Clockwork, CME Hikes Silver Margins Halting Surge
In tried and true fashion, just as Silver was about to viciously destabilize the global capital markets as it surged to new 31 year highs, the CME stepped in and did its usual 3-6 half life intervention by hiking initial and maintenance margins on silver futures from $11,138 and $8,250 to $11,745 and $8,700 respectively. This is merely the latest margin hike in what appears to be a neverneding series designed to reduce speculative "fervor" courtesy of endless liquidity. What it will do is merely provide a better entry point for those who by now realize that silver's next stop in the fiat endgame is $40, then $50, and so forth. Naturally, the price drop in silver caused gold to sell off too. And now that the CME accepts gold as collateral, we can't even visualize the reflexive loops that develop once the metal that is also a collateral currency becomes more and less valuable at the same time.
And while they are at it, the CME decided to remove some of the Uranium volatility by hiking maintenance and initial margins in Uranium Futures (UX) by about 50%.
From the CME:
This is what a coparable margin hike looked like in November.
This is certainly not the last margin increase - by the time this is all said and done, "speculators" will need to overfund cash positions to trade precious metals per executive directive.
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This is all good. As the margin requirements go up the paper market approaches the physcial market. It cuts longs and shorts. They can take it to 100% for all I care.
absolutely, its a paper price...
and as margin rates go higher and higher more people will begin to realize it's easier to just own the physical outright, fuck this paper rigged casino. I wish they would force a one to one value on the underlying so we can move beyond these little bullshit games.
this will be short lived, and ultimately this type of intereference will do absolutely nothing.
So we hit a new high, the crooks do their hit job, we consolidate for awhile, buy the dip and eventually a new high. I've yet to lose anything buying physical metal.
Holding physical gold & silver has benefits. Otherwise.. Margin call, party of 4, your table is ready.
Who are we kidding? SLV is just another buble inflated by FED contrarians and many especulators; especially the ones in this site. Staying in cash is the best position right now. I will not short this market as I have no control over the printing press. The market TOP has been put already; let's wait till end of QE2 and see what happens.
OK.
So if we see the likely wind down of QE2, do we see a stockmarket correction and a drop in silver? by how much?
Hold your paper as the Bernanke keeps printing to infinity. Sounds like a good plan.
+++++
someone has got to die over this bullshit or it will never stop...
Meaningless volatility of paper. The silver market is being driven by the relentless and merciless demand for physical. The crooks cannot win--only break their Comex sandbox.
Someone needs to shoot that clock.
Many people have already died in Egypt, Tunisia, Yemen, and Lybia. They are also humans...you know
Yep, has nothing to do with the takedowns.
It's a Freedom thing. You know, what we are losing here daily.
I'm sure they will be doing the same for SPOOS Soon. Never Mind - My Mistake - SPOOS to 20K and they will cut margin requirements to get them there.
With this latest margin hike the local coin dealers in my town are charging $5 over spot......this is nuts.
Is there a better route to buying physical to avoid the margin insanity?
Buy May, take delivery.
These guys always have product in stock, and premiums are never out of line.
I'm in there probably once every 2 months, buying or selling something. I unloaded some Palladium bars a couple of weeks ago.
Never heard of any shortages of the most generic and popular items.
http://www.golddealer.com/
+1, Other good ones out there but these guys are great. Tulving is awesome if you are looking at bigger buys.
you wanna do a straw purchase for me?
You need to go into the good delivery market, but that's over 575K a pop.
You need a bulk buy entry... or alternatively some means of pooling your purchasing power.
A trust company would crack it if you had like minded friends...
you mean "fiends."
Call it what you like disabledvet, I just described a very simplified investment fund...
$5 over spot on what EXACTLY?.
Bullion Private sector or Eagles,Maples???
I bet all the board members got short before they increased the margin.
What are the margin requirements on banksters levering POMO?
Why does a margin hike ALWAYS affect longs disproportionately? Is it because the big players are holding all the shorts? I mean, it seems like atleast once in awhile there would be a short buying frenzy on the heels of a margin hike, especially when virtually everyone who has a god damn long position MUST be in the green. Smells like shit.
To destroy the Hunt Brothers, the Fed issued an order to the banks not to lend to precious metals speculators. When Nelson Bunker flew to Europe to get loans to help meet his margin calls, European banks said "Volker has spoken" and they too wouldn't lend to them.
Great story it all is.
I was wondering what happened. I hope it is effective this time at flushing out some newcomers so I can buy my last big batch for a while.
Oh and with this beatdown March is now trading at a 25 cent premium to May. Backwardation, anyone?
Law of diminishing returns Blythe........ Nice try though!
Bring er down, I've been looking for another chance to load up. Looks like Blythe read my mind.... thanks you bitch.
arent metals expiration coincidentaly, soon, like in next week?
curious question, if you short lets say silver like the Murderer At the JPMorgue does, do they have the same margin rules?
Tuesday is "Roll" day and Wednesday is notice day
Buy and hold! We all know where this is going
Yup another take down, but there is upwards pressure and there is nothing they can do about it.
Why not 200% cash margin requirements to buy silver?
@ Carl Spankler
"I see no problem with CME or ICE hiking margins on precious metal contracts.
The exchange has to manage its own credit risks."
You mean covering up the fact that they have no fucking metal in their vaults?
AC
Margin applies to long and short positions. The CME increasing margin requirements simply reflects the recent volatility.
For longs with profitable positions, it means nothing, their account equity covers the increased requirement. For shorts, it is a different story. Some of them need to come up with money.
I think you you guys are getting you panties a bit too wadded up on this one.
I don't recall the CME decreasing margin requirements during the take down in 08. Did that happen?
OT:
U.S. Postal Service Cutting 7,500 Jobs, Closing 7 OfficesRegardless of the ongoing manipulation and lies-- it will all come to an end soon. There will be a reckoning far greater than anyone can imagine and it will come when you least expect it and from areas never once known.
On a side note this last display of price manipulation looks to scare the remaining contracts into some last minute deal-- it only provides a breather for momentum to continue.
They should eliminate all margin on PM futures contracts, period.
Make it all cash.
That will stop the raids permanently.
Because then the overleveraged, F12 punching, electronic digit flipping, CIGA's and GATA guys will stop trying to make a killing in the futures market and will be forced to buy physical only.
Additionally, the Speculative Locusts who constantly inhabitate the PM space, who cut and run at the first sign of trouble will move on to greener pastures, maybe NASDAQ stocks or something.
Then, and only then, will we acheive the price stability and slow, steady increase in price as we see day in, day out in the XRT and IYR.
Agreed.
The Paper Artistas are the culprit.
I know as soon as someone saw a $5.00 per oz profit, the paper would be flipped.
Take a little off the top every 3-5 days, and roll on.
Day Traders, are as much to blame as ETF holders.
Idiots not realizing holding will bring them real profits.
As long as Higher lows remain, we are steadily climbing.
But, the way this game is played, Vegas is almost better odds.I knew( as did most here)l, that there was NO way they were going to allow a close over 38.00, or a close over 1440.00 today.
Sure enough, as the Turd points out, here come the guys with the marked cards.
Who junks this? What are the other bright ideas, count on regulators to do their jobs? The regulators are to busy with porn and solitaire at work to do their jobs, we can't expect them to take on the heavy burden of their jobs.
LOL
+100% physical. Save the leverege for buying PMs on credit before the singularity.
I agree Robo however they are never going to get rid of margin because then what would be the point of holding paper contracts? The reward to risk is solely based on the question if the comex can deliver. So if they removed margin they would destroy their business.
Get rid of leverage in all markets - period.
o.o
And just like clockwork going on 11 years now - Mogul Rider and his merry band of party animals backs up the fucking freighter
If they keep doing this shit, silver's gonna blow to 200 bucks and ounce not 50.
Gold is easily going to 2000 without even a breath.They seem to think they are screwing us? Wierd man - they are fucking dumbasses.
At a party the other night in my neighbourhood - the sheeple were talking up the gold bubble. I just didn't the heart to let them know that becuase they had no precious they would be shipped off to China to work as concubines for the Chinese gadjillionaires who are BTFD.
I don't feel sorry for anyone anymore, we all have had an opportunity to adapt. Some are more equal than others it seems
As in Animal Farm eh?.
This shite truly qualifies for sure.
They're buying time. And allowing "the select" to reset their positions. Don't be a weak hand.
As a matter of fact, the raising of margin requirements does not ALWAYS adversely impact just the longs. If you remember, the last hike before this resulted in a spectacular rally instead. Either way, as others have said, the more they do this the more we draw closer to the day when all longs are physical and all shorts are paper. That is endgame my friends
http://www.youtube.com/user/BrotherJohnF?feature=mhum
Do not sweat it, guys, silver only down 1%. Look at EBIX however.
If there was any major squeezed short position in silver futures then the margin hike would drive the price up. We're seeing the opposite.
The entire silver short squeeze theory is a fantasy. People are delusional. Just follow price, it's going up. Does it really matter if it's a short squeeze, manipulation or industry demand?
Unbelievable how the market simply isn't allowed to dip below 1308 before the close. What a manipulated joke.
And Like Clockwork "Orange"...
yup, they are dumping gold, NEM down .31 cents. Better sell all.
Amazing posts here. Geesh.
I hear the SEC is collecting PORN and will run the PORN Domain Site. There are qulified lawyers who at SEC who can handle this.
Thank goodness they hiked the margins on PM's - frees up more margin for the E/S move to 2000.
Buy the fucking dip, you fucking idiots!
Stocks for the long term! Invest long and prosper!
<b>(I think I'm going to puke...</b>
White Mouse went short silver this morning...wasn't expecting such an immediate benefit but I'll take the profits and save for physical when it is again around $28.
Sorry guys, I love the metal too but I do not believe that this time, while inherently different, is going to be free from pullbacks and massive corrections.
"White Mouse went short silver this morning"
LOL.
Luvin it...!
This will have the same impact that raising margin requirements ALWAYS has -- TEMPORARY!
History has consistently shown that the half-life of margin changes is measured in hours, not weeks or even days. It also has another effect. By shrinking the liquidity pool, it ultimately reduces the capital available to bring more supplies on line, thus shrinking supplies and ultimately raising prices. It causes capital flight, which devalues the home (US DOLLAR) currency, also causing prices to rise. Just ask Hugo Chavez. His attempts to control prices have brought his people 20+% inflation and shortages of virutally everything!
SHHHHHHHHORRRRT IT, blow off top of parabolic move. any whiff of an end to QE or monetary tigheting and silver has a 2 handle and oil an 8 handle.
Fuck it! Buy more physical on the dips. What do I care about paper Silver holders? If JPM needs physical Silver in the future, they can pay out the ass to get it. Everyone has a price. I have one and I'll give you a hint: It's way north of $200/Oz! Oh yeah, if they try to tax the shit out of this later, I'll sell into the black market which they would have created.....
Junk Peace and Morgan silver dollars are melting at $29!
Silver, homies!
Margin=$8700
contract size =5000 ounces
Thats about $1.74 an ounce move per day. I have seen moves over a dollar more than once, and the higher the price moves, the more the price will fluctuate.
If you get a bunch of margin calls because the price moves more than 1.75, you will see a cascade of selling that will not be nice. So raising the margin to reasonable (say 150% of the largest moves seen yet) isnt such a bad thing. Anyone playing in silver future contracts should have enough money to cover a days losses, otherwise there will be even more volatility.
So is CME hiking margins on crude futures to help limit speculative fervor?
Hogs to slaughter. Silver and gold will wipe out the doomers.
You're really a Democrat. Aren't you? C'mon give it up.
on Thu, 03/24/2011 - 17:17
#1096945
"Hogs to slaughter. Silver and gold will wipe out the doomers."
Yeah man, the gold and silver bugs are just losing their collective asses right now LOL! Fucktard...
AC
Might be instructive to graph silver margin as percent of contract value. This is not so say they don't use such announcements to stampede leverage queens -- just that it makes sense for margin to up as contract value goes up.
I admired the take down and then added to my position. The perfect hedge against an XLF short (currently that trend is XXX profit)
You can run Ben but you cant hide.
All these margin hikes do is drive the small speculators out of the market and back into trading the mining stocks. That's OK.
J.P. Morgan Chase's 270 Park Avenue headquarter is surrounded by hallmarks of a looming desaster:
1. SNAFU Cocktailbar
127 E. 47th St., New York, NY 10017
http://nymag.com/listings/bar/snafu/
2. Banana Republic (Apparel shop)
a) 626 5th Avenue, New York, NY 10020
b) 107 E. 42nd Street, New York, NY 10017
3. Wolf & Lamb Delicatessens
10 East 48th Street, New York, NY 10017-1008 FYIJPMorgue, CFTC, SEC, Bernanke, and Geithner
Combo Orchestra Theme Song:
http://www.youtube.com/watch?v=iaysTVcounI
As an exposer of Internet shills, YOU (math man) ARE A SHILL I think most folks here at least recognize you as a troll, but not so, YOU ARE A SHILL
Blythe to COMEX; "Is it possible for the silver margin to go above 100%?"
quite distressing to see this happening, as a up an coming trader I had hoped to trade gold and silver on margin one day.
So much for the big ol' Raise-The-Margin Smackdown -- as of 11:30 pm EST, Au rising (+US$3.30), Ag rising (+US$0.24), or basically where they were ~ 24-36 hours ago.
And this in an end-of-Q book-the-profits month?
Try harder, Blythe & Stuporfriends. You can't repeal the laws of physics.
Viva -- Sager
P.S. Somebody wake me if the laws of physics get repealed.
BTFD
I think Math Man AND Mark McGoldrick
Suck each other off.
God, when are these morons at this blog going to realize that margin is a formula of price and underlying volatility. It's not some fucking conspiracy to drop the market. Just like when the market dumps and vol comes in margin will drop. The higher the price goes the more money required to control 10% of the contract price. Not differential equations here.
When we get the move through the intraday all-time-high around $50 even, I would expect to see a move anywhere from the mid eighties to the 120's.
A breakout from a long ago established previous high, like that in Silver, is not just some minor move.
As an example look at crude and the move above the previous high dating back to the early 80's in the mid 40's, the next big move went to 147.
And margins are not just a % of capital, they can and are used for other reasons, like in 1981, the Comex went to full cash, it was 5,000 oz's X the spot price long on the account before the next days open, then Comex went to liquidation only, to break the Hunt Bros., and no new spec. positions were allowed.
So whomever said it's a simple math calculation, and that's all, has his head up someone's ASS.
I saw first hand the above example and was there placing trades it for hedging and spec clients. I also remember when the Hunt Bros were forced into selling huge positions in 4 stocks long on their account and created a sizable panic around high-noon.
AGQ is a fantastic play IN A RISING MARKET. It has been "bery, bery good to me" over the last year. I was able to get in, get out, get in, and get out, all with substantial gains. HOWEVER, be careful with AGQ. It can prove to be a terrible play if silver pulls back, which is almost inevitably will do, and very soon. A $2 drop in silver price will take AGQ from $210 to $180 in minutes. If silver enjoys a genuine and healthy pullback to $23, AGQ will go to $100-$120 range. Now, THAT is the time to buy. Once silver resumes its bull market rise to $50+, AGQ will go to $300 or so. So, if you can get out of AGQ now, buy in at the bottom of the pullback (again, silver $25-$25), they you will make a fortune. It is a great play, be beware the pullback.