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Easy Come, Easy Go: The SLV Put Buyer's Story Comes To A Close... With A Wash

Tyler Durden's picture




 

A little over a month ago, when silver was trading at just about $40, a silver put buyer made headlines (and even arguably moved the price of the metal) after buying $1 million worth of SLV July $25 puts. The same buyer made further headlines after he or she generated a 68,294,229,502,717.3% annualized return 4 weeks later. Well, today the trilogy comes to a close with the last headline saying something to the nature of "easy come, easy go..." - following a massive surge in the July $25 puts volume, we have learned that the same put buyer has offloaded his entire 10k put block.... at a complete wash. In other words, someone just got a very stark lesson in why a 500% paper profit can be converted into a 0% realized non-profit (and loss when factoring transaction costs) in just three weeks.

Today's SLV options volume and trades:

...Peak return as of May 6 (highlighted here)

...And the denouement.

h/t Jason

 

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Thu, 05/26/2011 - 11:18 | 1313202 Josh Randall
Josh Randall's picture

Sleazy Come, Sleazy Go

Thu, 05/26/2011 - 11:18 | 1313218 6 String
6 String's picture

since they didn't close their position with the huge $ gains, it's clearly someone with deep pockets. Must be the "doing god's work" company.

Thu, 05/26/2011 - 11:20 | 1313232 Ahmeexnal
Ahmeexnal's picture

MathMan was last seen riding around Hialeah in his Ferrari, frantically searching for his ass!

Thu, 05/26/2011 - 11:28 | 1313249 Sock Puppet
Sock Puppet's picture

He hasn't been around for awhile.  He must be out digging silver out of the ground for $5/ounce.

Thu, 05/26/2011 - 11:41 | 1313296 JW n FL
JW n FL's picture

I need an esquire to File Suit in Federal Court Against the U.S. Government.. more over the President of the United States of America. Pro Bono in the name of Fight Club!

 

The Law Suit is for breach of the Constitution for bringing home the U.S. Army and now Training the U.S. Army to operate Against "We the People".

 

Who wants to get some T.V. face time for themselves and for Tyler here.. we want warm bodies to educate we have to up our visible profile.

 

I am looking for feedback and ideas to make as big a splash as possible! so if you have something that will help, speak up! even if you think its small! speak up! every little thing matters and helps! SO PLEASE!!! Speak Up!

 

 

Thu, 05/26/2011 - 12:07 | 1313411 augie
augie's picture

you had me at hello.

 

email me @ nomorepants11@yahoo.com

Thu, 05/26/2011 - 12:13 | 1313436 JW n FL
JW n FL's picture

you have mail!

Thu, 05/26/2011 - 12:38 | 1313538 jus_lite_reading
jus_lite_reading's picture

YEAH SILVER BITCHES!!! THE SHIT IS HITTING THE FAN NOW IN JAPAN!!!
SUPER SYPHOON HEADED TO FUKUSHIMA!!!!! EARLESS RABBIT BORN!!!! WTF?? THE SKYS THE MILIT FOR RADIATION!!!

http://fiatsfire.blogspot.com/2011/05/theatrical-thursday-greenpeace-sla...

Sorry about the all caps but I AM EXCITED..... no I am more like worried that few people will know what is going on and then it is too late!!!

 

Thu, 05/26/2011 - 13:57 | 1313788 Oh regional Indian
Oh regional Indian's picture

But thanks for sharing.

ORI

Thu, 05/26/2011 - 17:37 | 1314542 jus_lite_reading
jus_lite_reading's picture

ALSO ORI this may interest you

http://ex-skf.blogspot.com/2011/05/tepco-areva-contract-to-treat.html

MUST READ!!! BE SAFE!!

Thu, 05/26/2011 - 14:44 | 1313919 Weimar-eddie
Weimar-eddie's picture

I thought at $35 he had to run out and buy a shit ton of silver because then it was "for the right reason" and "at the right price."

Thu, 05/26/2011 - 11:29 | 1313257 Josh Randall
Josh Randall's picture

I thought MethMan had a Miata ? With with the Miami Vice circa '86 music crusing the streets with his throw back 80's Gordon Gecko wannabe look telling all the waitresses at Hooters he is a mogul while wiping wing sauce on his paper napkin..

Thu, 05/26/2011 - 11:29 | 1313268 JW n FL
JW n FL's picture

If I find that trash in South FL I will have him fed to an alligator, one finger knuckle at a time.. so he can watch himself be eaten alive...

 

just kidding, hes great!

Thu, 05/26/2011 - 11:34 | 1313276 Sock Puppet
Sock Puppet's picture

I've always thought Mathman sounded a lot like Mako, maybe the same guy behind both.

Thu, 05/26/2011 - 11:58 | 1313385 Vic Vinegar
Vic Vinegar's picture

Maybe.  Mako was all about the math, compounding principle and interest getting us in the end.  He was right, for certain, but he was also a whiny bitch.  All I ever saw from MM was that silver won’t save you either.  But at least the only ‘costs $5 to dig out of the ground’ was funny.

Thu, 05/26/2011 - 18:35 | 1314725 firefighter302
firefighter302's picture

RE: self-promoting posts...

The best and bravest firefighters I worked for/with never showed up at the awards dinners.

Turns out, awards and public accolades were not what they were about.

They were about something much bigger.

 

 

 

Thu, 05/26/2011 - 18:07 | 1314632 Freddie
Freddie's picture

No cucho - he was down at Bird Road near Frank Lopez Motors in Coral Gables.

http://www.miamiherald.com/2011/05/24/2232993/bird-road-shut-down-while-police.html

I send Manolo to Gus Machdo in Hialeah to find MathMan that piece of dirt.

Man - I am getting tired of doing Tyler Durden f*cking integers when I post. We only had Soviet shoes with holes and octopus in Cuba. No integers.  

Thu, 05/26/2011 - 11:25 | 1313239 NotApplicable
NotApplicable's picture

Makes more sense than the idea that someone let that much profit evaporate without realizing a penny of it.

Thu, 05/26/2011 - 11:31 | 1313265 6 String
6 String's picture

Another thought, too: With that huge put, the paper silver market cracked and made a lot of folks nervous. I believe this put was placed not too long before that fateful Sunday night were silver dropped 15% in 15 minutes while every market sands Japan was closed. Only to be followed up with the Monday morning margin hike...and Wed...then Thur....then Friday.....then Tues....the Thurs.

Yup, thinking about it, that huge put was just the first strike in the concentrated take-down effort by Jesus Jamie and Lloyd the "God."

 

Thu, 05/26/2011 - 11:34 | 1313283 nope-1004
nope-1004's picture

Agree, 100% coordinated.

Read my comment below.  If they exercised that option, they'd look all too obvious and attract way too much attention.

 

Thu, 05/26/2011 - 12:13 | 1313448 Saxxon
Saxxon's picture

Agreed nope-1004 and others.

Thu, 05/26/2011 - 11:39 | 1313301 Manthong
Manthong's picture

So then.. as it was not closed out on many, many profitable occasions, it means that it was never intended to be closed out at a profit?

Say it it ain't so.

Thu, 05/26/2011 - 11:56 | 1313357 Bay of Pigs
Bay of Pigs's picture

That is correct. Those who manipulate PM's are rarely sellers for profit. That is the whole crux of the massive concentrated short postitions held by these criminal banksters. It is not legitimate hedging.

Thu, 05/26/2011 - 12:58 | 1313595 jus_lite_reading
jus_lite_reading's picture

Correctamundo..... why do you think these banksters are reporting not a single day loss in an entire YEAR?!?!

Thu, 05/26/2011 - 11:41 | 1313314 Hal n back
Hal n back's picture

volatility also crashed a few days ago--mostly I assume due to perception if not reality that low to mid 30's would be the bottom and if not, the very hi 20's, rendering the 25 puts expiring in 45 days rather iffy. Good for a cheap play.

 

I though one major rule with options is once you have nice profits you start chipping away at position taking profits off table one way or another-some take out their cost and continue using OPM. To each  his own. But you have to do something.

 

 

Thu, 05/26/2011 - 16:30 | 1314265 DrFever
DrFever's picture

I wrote about this on my blog.  I suspected something was very fishy when it all went down.  I am of the view that there is more to this story than meets the eye.

http://thefundamentalview.blogspot.com/2011/05/cme-group-must-investigate-these-silver.html

Thu, 05/26/2011 - 11:19 | 1313206 Quintus
Quintus's picture

Bulls make money, Bears make money, but pigs get slaughtered.  Never get too greedy.

Thu, 05/26/2011 - 12:57 | 1313600 Cthonic
Cthonic's picture

Precisely.

Thu, 05/26/2011 - 11:19 | 1313208 IEVI
IEVI's picture

Must have been MethMan..what a douche.

Thu, 05/26/2011 - 11:16 | 1313210 Dr. Richard Head
Dr. Richard Head's picture

If you are playing with paper you are playing with fire.  3rd degree burns may appear over night.  Lack of physical can lead to loss of apetite, loss of sleep, and nausia.  An erection lasting more than four hours is not normal.  Seek immediate medical help.  Paper silver is not for everyone and should be considered a ponzi man's game. 

Thu, 05/26/2011 - 11:22 | 1313212 HamyWanger
HamyWanger's picture

The false recovery in silver got instantly hammered this afternoon. Poor tmosley... 

I've just taken some more SLV puts @17.5

Thu, 05/26/2011 - 11:27 | 1313245 NidStyles
NidStyles's picture

umm, $36 and rising.

Thu, 05/26/2011 - 11:29 | 1313256 HamyWanger
HamyWanger's picture

Enjoy the ride to $25 before July

Silverbugs will soon panick and dump their Eagles en masse onto the open market. 

Thu, 05/26/2011 - 11:31 | 1313277 JW n FL
JW n FL's picture

I am building a mountain of silver.. using green boxes like legos! the only flood maybe if my monster box / lego mountain fails under the wieght...

Thu, 05/26/2011 - 11:47 | 1313330 Manthong
Manthong's picture

I'm thinking I might need to get the basement floor compression tested because I don't want any cracks to form.

Thu, 05/26/2011 - 11:46 | 1313335 Shock and Aweful
Shock and Aweful's picture

You sir...as they say....are a troll.

 

Thu, 05/26/2011 - 12:10 | 1313438 Doyle Hargraves
Doyle Hargraves's picture

Yeah $25???!!! I bought a lot at under $10...$25 is an opportunity to load up some more! Of course this is just the paper price, try and get some actual metal at the current spot. Cannot do it. I love how these guys think 'silverbugs' will run from a position we have been in for YEARS if not DECADES at the drop of a dime. Even at $25 in July, (which may be true for some paper), I would be surprised if you could actually find some physical at that price. See the thing is all this paper (stocks, bonds, paper commodities, etc.) is just that-PAPER. I use paper when I take a sh*t, what the f*ck is the difference what is on that paper? When I want something I guarantee I can get it with silver and always will be able to. Ask Zimbabwe how well paper is working for them?!

 

http://shop.ebay.com/i.html?_nkw=zimbabwe+dollar

Thu, 05/26/2011 - 18:23 | 1314681 CompassionateFascist
CompassionateFascist's picture

I "panicked" right out of SLV...and into the solid stuff. I love the sound of silver in the morning. That heavy clink when one 100 oz. bar settles on top of another. Also, limp organ, widening premiums on silver eagles over paper-at-spot shows that a real market is separating from the manipulated,  paper Ponzi fake market. So enjoy the sound of "puts", and "calls", and "longs", and "shorts". That'll all soon be history.  

Thu, 05/26/2011 - 11:27 | 1313258 Robot Traders Mom
Robot Traders Mom's picture

Ha ha ha. That is something my son would say. He is also a complete fucking tool as well.

Thu, 05/26/2011 - 11:36 | 1313284 Sock Puppet
Sock Puppet's picture

This is Hammy not Harry.  Everything Hammy says is tongue in cheek to just antagonize. I suspect you might have a sense of humor as well.

Thu, 05/26/2011 - 11:29 | 1313271 tmosley
tmosley's picture

He says as he types into his paper computer.

http://www.youtube.com/watch?v=IbQNrVX4GXk&feature=related

Thu, 05/26/2011 - 12:36 | 1313519 fonestar
fonestar's picture

If you honestly believe that you are a total moron.  Nobody cares about the CRIMEX or your stupid fucking government and their doped up minions.  Silver is a cash-physical market and nobody gives two sweet fucks about the SLV anyways.

Do you think the Chinese amass Gold and Silver only to allow the US to continue manipulating the markets?

Thu, 05/26/2011 - 11:17 | 1313213 Jreality
Jreality's picture

"68,294,229,502,717.3% annualized return "   LMAO!  There isn't enough money on the planet even with Uncle Ben's printing presses. 

Thu, 05/26/2011 - 11:45 | 1313334 Hal n back
Hal n back's picture

the % return falls in the category of newsletter writers saying they earned 1000% this week and last trading this and that. What they do not say is you have to be an idiot to make a huge bet where the dollars of profit are significant in addition to the %.

Thats whew the ability to get in options when a trend is in place and having the ability to actually manage your money is important.

Thu, 05/26/2011 - 11:20 | 1313216 the not so migh...
the not so mighty maximiza's picture

They knew about all the margin hikes beforehand but miscalculated them obviously.

Thu, 05/26/2011 - 11:28 | 1313241 nope-1004
nope-1004's picture

No, the news in and of itself was part of the operation.  Taking the profit would expose the fraud too clear for all to see.  This way, the objective of lowering spot price was achieved without ringing alarm bells and, as many here have stated, who in their right mind would not take profits?

So it worked.

White-collar bankster crime, fraud, and theft is alive and well in this model of a free market.  What a joke.

 

 

Thu, 05/26/2011 - 11:30 | 1313259 the not so migh...
the not so mighty maximiza's picture

Interesting,  I was thinking they were told more margin hikes would occur than what actually transpired.  It would be obvious though your right.

Thu, 05/26/2011 - 11:55 | 1313353 Eric Cartman
Eric Cartman's picture

Once it hit mainstream I knew it was over. I was on the sidelines though. 

Thu, 05/26/2011 - 11:47 | 1313328 DeadFred
DeadFred's picture

How about a multi-level play with the single psy-ops bet plus scattered under the radar bets. Take profits from the anonymous puts and leave the glaring purchase until you have to close it out at break-even level? That might make it a real profit-making ploy and not a bankster manipulation.

Thu, 05/26/2011 - 12:06 | 1313401 Diogenes
Diogenes's picture

Since when did they worry about being obvious?

Thu, 05/26/2011 - 11:21 | 1313219 Nicholaz
Nicholaz's picture

You never know if it was speculation or merely a hedge. 

Thu, 05/26/2011 - 12:01 | 1313387 Thisson
Thisson's picture

Yet everyone always seems to think a big options bet means X, without considering that the trader may have other offsetting positions in their portfolio.  You can't infer anything from a big options trade.

Thu, 05/26/2011 - 11:21 | 1313223 SuperRay
SuperRay's picture

hey, Tyler, why don't you post that Bart Chilton interview on CNBC yesterday.  Looks like he might actually do something, god forbid...

Thu, 05/26/2011 - 11:28 | 1313266 luk427
luk427's picture

Not according to Ted Butler and he liked Bart.  http://news.silverseek.com/SilverSeek/1306416249.php

Thu, 05/26/2011 - 18:00 | 1314624 Al Gorerhythm
Al Gorerhythm's picture

Ted is still gooey-eyed over that CFTC pin up boy, Bart. There's a touch of "love forlorn", a desperate hope, that Bart will be his white knight. 

From the article:

"Between the CFTC (which I still consider incompetent, rather than duplicitous) and the CME (which I have always considered an ongoing criminal enterprise), you would think there would be enough silver silence to go around. But there’s more. It has been two and a half years since I publicly indentified and accused JPMorgan as being the big concentrated silver short and chief manipulator."

Nuff said.

Ted niftily avoids the connections of Gensler, he being an ex-Goldmanite. Ted, once a gang member, always a gang member. 

His latest push is for all to write to their congress critter and whine about how crooked the CME is and how incompetent their friends in government are.

Excuse me Ted while I call congress on the big white porcelain telephone....... TAAAARRRRRRPPP! 

Thu, 05/26/2011 - 11:21 | 1313224 firstdivision
firstdivision's picture

Wow!  This person made such a bad decision by being overly greedy.  No sane person would not have started to unwind it when it was 100+%. 

Thu, 05/26/2011 - 11:18 | 1313225 topcallingtroll
topcallingtroll's picture

I take profits early.
Some people take them late.

In the long run both will probably come out about the same.

Thu, 05/26/2011 - 11:26 | 1313243 HamyWanger
HamyWanger's picture

The secret to riches is to close winning trades as late as losing trades, or the reverse. 

People usually wait when they have -$1000 on their Interactive Brokers account, but never wait to have +$1000. 

Thu, 05/26/2011 - 11:34 | 1313282 Nicholaz
Nicholaz's picture

That's one for the book of financial poetry.

Thu, 05/26/2011 - 11:23 | 1313231 DK Delta
DK Delta's picture

Greed will fuck you every time

Thu, 05/26/2011 - 11:38 | 1313297 nope-1004
nope-1004's picture

Depends who made the trade.  I maintain it was a coordinated effort by the big banks, the Fed, CME, CFTC, etc....

Your comment should read:

"The big banks and Fed will fuck you every time".

 

Thu, 05/26/2011 - 11:24 | 1313234 BeerGoggles
BeerGoggles's picture

wtf does any of this mean?

if they make 500% then that's 500% how can it become 0% all of a sudden if the price has moved much.

Thu, 05/26/2011 - 12:07 | 1313409 mayhem_korner
mayhem_korner's picture

Price isn't the only factor in option values, BG.  Vol and t, especially way out-of-money strikes...

Thu, 05/26/2011 - 11:24 | 1313235 SuperRay
SuperRay's picture

hey, Tyler, why don't you post that Bart Chilton interview on CNBC yesterday.  Looks like he might actually do something, god forbid...

Thu, 05/26/2011 - 11:25 | 1313238 Robot Traders Mom
Robot Traders Mom's picture

Speaking of SLV options, how is everyone doing? It seemed like the sentiment around here over the last year has gone from pure physical to a mix with options.

I personally don't understand why people would trade options in a manipulated market...

Thu, 05/26/2011 - 11:29 | 1313252 NidStyles
NidStyles's picture

Still 80-20 split between Physical and Miners. No option's.

Thu, 05/26/2011 - 11:31 | 1313262 Robot Traders Mom
Robot Traders Mom's picture

good call. i'm still waiting for the juniors to catch up. i'd like to just cash out my 401k and buy more phys but fuck it, i know the risks of holding dollars.

Thu, 05/26/2011 - 11:40 | 1313293 fuu
fuu's picture

maybe you are confusing the 1.56296E+17 sock puppets who trumpet paper vs the 593 people who own physical.

Thu, 05/26/2011 - 16:34 | 1314285 DoChenRollingBearing
DoChenRollingBearing's picture

Oh, there 592 other owners of physical?

Watch where you're pointing that thing!  Unless they're silver bullets.

Thu, 05/26/2011 - 12:14 | 1313439 NidStyles
NidStyles's picture

Miner's I have:

 

FCX, to play both sides. Economy improves Copper goes up, economy goes down Gold goes up. Bought before the split and the eventual doubling of the stock. Very happy with that one, especially since they are local for me, and I can get to their headquarter's in like 5 minutes. Yes, I've been there to take a tour. 

GPL, just because of the dollar cost averaging potential for it. I bought about a year ago, and started buying in again on the way down again. If it's above $2.90, I'm in the black.

Kodiak, can't remember the ticker for it, but it's a exploration company that has pretty good potential, but I'm not betting the whole house on it. The have worked with Revett and Pan American in the past though.

PAAL, I have no idea how much is in there, but I bought into it when silver was around 19-21. I don't actively check that account, but I'm sure it's doing just fine.

 

My biggest play is FCX for reason's that I stated. I like to know where my money is going.

Thu, 05/26/2011 - 12:50 | 1313578 rockraider3
rockraider3's picture

I haven't looked into this yet, it's on tap for the next week or so.  But have you looked into borrowing against your 401k to buy PM's?  I've heard of some people doing that.  I personally don't want to cash out and take the tax hit, nor do I want to give up the employer match (50% in my case)... but at the same time, my investment options in my 401k plan are terrible.

I believe that lack of appropriate 401k investment options, the primary retirement savings vehicle that Americans invest in, will be a significant factor in the coming (or continuing) theft of American wealth.  And people wonder why Americans invest so little in PM's as a percentage of their wealth... it's because most people have 401k plans (and save little outside those plans) and those plans don't allow PM investment by and large.

Thu, 05/26/2011 - 15:04 | 1313967 Sub-MOA
Sub-MOA's picture

I cashed out my 401k and with additional FRN savings I went heavy into PMs last September at 85/15 AG/AU.  I most certainly do sleep better now, too.

Thu, 05/26/2011 - 12:04 | 1313288 camoes
camoes's picture

Looks like an offset of my Jan 12 $31 Calls...bought them last Feb, had a 500% unrl profit now it's only 220%...

Emotionally it sucks going to the 50th floor and then fall to the 20th...but it teaches you to be resilient and patient

Manipulated or not RoboMom, I'd rather have my net worth is something that I can liquidate at any moment...I understand some people have preference to have something physical and that they can feel at their hands, but I don't want to be holding my bag of coins if somehow gold and silver blows up (and it will someday, once it skyrockets just like the 70s).

I still think the go physical argument seems very similar like the whole argument I used to (and still do) hear about housing as an investment. You know, a house you can see, yoyou can feel and you can use, so it will never lose value...I'm not against physical or anyway, but I wouldn't have a signifcant portion of my net worth in it, but maybe because I'm young my risk aversity is very low. Maybe when I get old I would have a significant portion of my net worth in real estate and farmland (hopefully derived from my gold and silver metal/mining profits)

Thu, 05/26/2011 - 11:41 | 1313295 tmosley
tmosley's picture

Options are for the greedy/crazy brave.  I'm still all physical.  Sure, I could probably make a bunch of fiatscos playing volatility in silver, but I would never get paid in the event of a COMEX collapse, which is what I am betting is going to happen.

The only possible way I would even think about playing paper at this point would be to short COMEX silver via a broker that I TRUST (like EuroPAC), who will also take delivery of physical silver for me with the proceeds from the short sale.  No margin.

The thing is that I have trust issues, and I'm not really certain that I could rely on EuroPAC in the insanity following a default.  Or worse, I could get caught up in some sort of paper game, where they drive the paper price up by a few thousand percent for a few seconds, forcing a liquidation of my physical position.

This is why I stick with 100% physical metal.

Thu, 05/26/2011 - 11:56 | 1313370 camoes
camoes's picture

Seriously, do you really believe a Comex collapse would happen? They're the market-maker and can I change the rules as they please (it's like being the market and regulator).

I get tired of all this comex collapse, SLV is a scam argument. Do you really think Blackrock would risk their reputation with something as small as SLV to them???

On the other hand, I would buy the argument that the goverment may change the taxing rules regarding commodity/metals financial investment and may decide to raise taxes on that on the argument of dampening volatility/punishing the evil speculators who are "manipulating" the market upwards...cause you only evil if oil/metals go up, if you drive it down you're Bernanke's BFF

Thu, 05/26/2011 - 12:14 | 1313453 tmosley
tmosley's picture

COMEX inventory continues to drawn down to all time lows, even as OI remains high.  Defaults are occurring left and right (every time someone who has stood for delivery walks away without a corresponding delivery IS A DEFAULT).  This seems like the exact type of environment that is ripe for a COMEX collapse.  The law is already being bent/broken to keep them in business.  The underlying reason for the law will put a stop to this foolishness soon enough, as the defaults become much, MUCH louder and more public, with industrial users being denied physical silver at some point.

Just because the dollar value of an instrument is small doesn't mean it is insignificant.  Remember, silver's price has been kept down artificially for years or decades.  Blackrock, and a lot of other firms, would HAPPILY accept the risk to their "reputation" in exchange for access to free money from the Fed, and favor from Washington. 

Thu, 05/26/2011 - 13:41 | 1313756 VogonPoet
VogonPoet's picture

This seems like the exact type of environment that is ripe for a COMEX collapse.

Can you elaborate on why specifically this is the EXACT environment for a collapse? Are there other such collapses you are comparing too? What underlying fundamentals, quantitate specifically, are gearing this for a collapse? If this is so apparent then why aren't some high power hedge funds accelerating the inescapable demise, or maybe some are, do you know of any?

Thu, 05/26/2011 - 14:36 | 1313902 tmosley
tmosley's picture

Trader Dan had a good write up on commercial signal failures, which this would be--though a particularly large one, one that is large enough to bring down the exchange (due to their own actions in allowing outsized, likely naked, short positions.

http://traderdannorcini.blogspot.com/2011/02/what-is-commercial-signal-f...

To answer why more people aren't taking advantage of this, I would argue that they are, and that is exactly why we are seeing this drain from SLV and COMEX inventories, which is, as you surmised, accelerating their demise.  You can bet that there are both sovereign wealth funds, and hedgies behind those drawdowns.  I would also bet that many of them are also long futures with a plan to stand for delivery (after having already taken delivery on large amounts of silver, both at retail and from bullion banks).  Whoever they are, they aren't talking--at least not to me, or to anyone in the community.

I see this playing out a lot like the housing market, but with the directions reversed.  The revaluation of silver will have a similar effect on the banks that the revaluation of housing did (and is).  Sure, lots of money will be printed to prop up the TBTFs, but they can't stop the rise of silver after the big default, just like they couldn't stop housing prices from falling.

Thu, 05/26/2011 - 13:47 | 1313759 VogonPoet
VogonPoet's picture

Dupe, sory, pos tmobile network

Thu, 05/26/2011 - 13:45 | 1313762 VogonPoet
VogonPoet's picture

Dupe, sory, pos tmobile network

Thu, 05/26/2011 - 12:18 | 1313455 NidStyles
NidStyles's picture

Blackrock's reputation? LOL! You are aware that they are front for the CIA right?

Thu, 05/26/2011 - 16:39 | 1314294 DoChenRollingBearing
DoChenRollingBearing's picture

tmos, I hear you all the way: 100% physical.

Thu, 05/26/2011 - 11:38 | 1313298 Flakmeister
Flakmeister's picture

I trade SLV options.... kick myself for being greedy recently. I buy long dated in the money, e.g I loaded up on the Jan 12 25's when the underlying was 30 or so in Jan.... I then sell short term theta against them.

 I also have physical and a very diversified portfolio of juniors....in for the long haul.  FVI.TO, IPT.TO, SLX.TO, SLW, PAAS, TGB, EXK, AG, AVR.TO, GRS, GSS, HLPRB, ORV.TO, AMC.TO etc....

Thu, 05/26/2011 - 12:13 | 1313432 TradingJoe
TradingJoe's picture

Ah, talking your "book" Flak?!

Thu, 05/26/2011 - 12:29 | 1313501 Flakmeister
Flakmeister's picture

Naw... just name dropping...I have picked up a few good tips here and have returned the favor...

I also trade GDX options, same idea, also picked up some Jan 13 GLD 135 calls at 15 recently....

Thu, 05/26/2011 - 12:01 | 1313381 DeadFred
DeadFred's picture

Why would you not trade options in a manipulated market? The manipulation makes the outcome that much more likely. I have no idea when aapl will come out with ipad3 or if it will be a dog, but that slv takedown was really obvious it was coming. It didn't work as well as they hoped but who here didn't see it coming? No options for me now though since I can't guess if the takedown is over or if it's up to 50 again. All cash now until things clarify.

Thu, 05/26/2011 - 12:06 | 1313418 Biosci
Biosci's picture

Physical gold, paper silver, 50/50.  Manipulation -> volatility -> profit.  Good theory, anyway.  It works until it doesn't, but while it works, it's a fun ride.

Thu, 05/26/2011 - 11:23 | 1313242 NidStyles
NidStyles's picture

Dude Soros dumped his holding's the week prior.

Thu, 05/26/2011 - 11:33 | 1313274 Tail Dogging The Wag
Tail Dogging The Wag's picture

Soros dumped his paper and got physical, but the news was "soros gets out of metals"... howmisleading.

Thu, 05/26/2011 - 11:38 | 1313299 camoes
camoes's picture

How do you know he got physical? Could you please link it?

Thu, 05/26/2011 - 12:17 | 1313463 NidStyles
NidStyles's picture

Hadn't heard about him getting Physical. I know I saw the $220mm in volume dump when he sold though. I almost spat my beer out when I saw that roll by.

Thu, 05/26/2011 - 13:59 | 1313808 So Close
So Close's picture

Proof?

Thu, 05/26/2011 - 11:32 | 1313267 BeerGoggles
BeerGoggles's picture

wtf does any of this mean?

if they make 500% then that's 500% how can it become 0% all of a sudden if the price has moved much.

Thu, 05/26/2011 - 11:49 | 1313341 Urban Redneck
Urban Redneck's picture

They never made 500%, because the trade wasn't closed, in the meantime the time value of the remaining lifespan of the option the evaporated (recent price movement didn't help either).

http://en.wikipedia.org/wiki/Valuation_of_options

http://en.wikipedia.org/wiki/Black-Scholes

by Urban Redneck
on Thu, 05/05/2011 - 15:56
#1244775

 

July 2011 puts, it's not a profit until the trade is closed.

Thu, 05/26/2011 - 11:56 | 1313356 BeerGoggles
BeerGoggles's picture

Oh, I see, he was targeting $25 and it expired?!

Well, that's why options is a mug's game. If he'd shorted he could have taken it whenever he wanted.

Thu, 05/26/2011 - 12:06 | 1313404 DeadFred
DeadFred's picture

You're assuming he didn't short as well as buy puts. The options didn't expire, he closed them for about what he paid for them.

Thu, 05/26/2011 - 12:17 | 1313459 Urban Redneck
Urban Redneck's picture

Or open the big options position to obtain a better exit from an already open short position.  The primary vehicle of the trade could even be SLV or entirely outside of silver (e.g. gold correlation)  

Too many possibilities to positively determine motivation without knowing the identity of the trader.

But he apparently never realized the huge gain on the options position. 

Thu, 05/26/2011 - 11:34 | 1313275 Eric Cartman
Eric Cartman's picture

haHA! Greedy asshole! 

Thu, 05/26/2011 - 11:33 | 1313280 AboutAverage
AboutAverage's picture

Today, real physical silver 999 proof is selling over $40 per oz.   Seems like light volume from what i can see but when the bids are there, it is over $40 per oz. 

Thu, 05/26/2011 - 11:46 | 1313285 SparkyvonBellagio
SparkyvonBellagio's picture

What is SHOWS IS WALL STREET IS CROOKED/RIGGED PONZI CENTER OF SCUM.

Nothing rings truer than-  "Unless you're INSIDE you're OUTSIDE."

 

That's all it shows.

 

95% of these extremely well compensated money runners couldn't trade their way out of a wet paper sack if it wasn't "FIXED" from the get-go. They're all sheep but with a road-map of rigged-preordained trades. Pull your money out of the markets and put it to good use for your family.

Don't give Wall St the satisfaction of dry-humping another 'victim'.

 

 

Thu, 05/26/2011 - 11:40 | 1313309 TideFighter
TideFighter's picture

Methman's Ferrari is actually a FIAT X1/9.

I wish I could post pictures. Anybody?

Thu, 05/26/2011 - 11:44 | 1313331 tmosley
tmosley's picture

You can post a link to the picture...

Thu, 05/26/2011 - 12:37 | 1313533 espirit
espirit's picture

More like a FIATSCO X1/9.

Thu, 05/26/2011 - 11:43 | 1313322 Arnolds Love Child
Arnolds Love Child's picture

NSA trading desk not for profit psy op.

Thu, 05/26/2011 - 12:38 | 1313526 espirit
espirit's picture

For a newbie, that's not bad theory.  You might have found a home here.

Thu, 05/26/2011 - 14:38 | 1313900 Hephasteus
Hephasteus's picture

The best way to avoid being governed.

http://www.youtube.com/watch?v=MtsmuVA0m7c

 

Thu, 05/26/2011 - 11:44 | 1313327 RobotTrader
RobotTrader's picture

XAU at the low of the day.

Tiffany's screaming, now up 9% on 2x normal volume

Oh, the comfort of being a "consumer discretionary" fund manager, not having to worry about:

- PIIGS defaults

- Inflation vs. Deflation debates

- COMEX scares during options expiration

- "Risk On vs. Risk Off" gyrations

- Wildly vibrating FX markets

Eric Sprott and John Hathaway must be contemplating a career change.


Thu, 05/26/2011 - 11:51 | 1313347 tao400
tao400's picture

I generally like you but you say the stupidest stuff. What do mean hathaway and sprott are talking a career change. Don't be so stupid, at least not all the time. Both of them were in silver at 18 or so and in gold probably around 500. What are you talking about?

Thu, 05/26/2011 - 12:15 | 1313442 camoes
camoes's picture

Don't even waste your time, asking Robo to explain his arguments, that's like saying to someone retarded to not be stupid

Thu, 05/26/2011 - 11:56 | 1313358 lieutenantjohnchard
lieutenantjohnchard's picture

robottrader's widows and orphans portfolio of hd, vz, jpm at low of day.

self-acclaimed ("i can do this") trader hopelessly afraid of losing seed capital.

spends day a la walter mitty dreaming and envying perceived beautiful people in hamptons, wishing he could be one of the select.

distracts self by posting all day at zh.

accomplishes nothing.

 

Thu, 05/26/2011 - 12:05 | 1313397 SheepDog-One
SheepDog-One's picture

MomoFaders papertrade portfolio is re-arranged daily after he sees what happens to be up, erases what went down and ads the new 'names' to his 'trusty old stalwarts' list. Someday he may actually buy and sell stocks, but for now (and last 3 years) its all been paper trading, with eraser use high.

Thu, 05/26/2011 - 13:12 | 1313638 lieutenantjohnchard
lieutenantjohnchard's picture

that's right. if he does take a position the board may be spared from him.

Thu, 05/26/2011 - 11:47 | 1313329 camoes
camoes's picture

Guys seriously, how do you know this isn't a hedge? It could be a silver miner hedging it's production (or someone like Sprott), but if it was a small investor, it must suck to be him...

Thu, 05/26/2011 - 11:47 | 1313338 Hobbleknee
Hobbleknee's picture

pwned

Thu, 05/26/2011 - 11:47 | 1313339 FoieGras
FoieGras's picture

That's why people who are looking at options volume assuming they are guaranteed to be directional bets are fools.

Thu, 05/26/2011 - 11:56 | 1313359 John Bull
John Bull's picture

This guy scalped his ass off. The gamma on that put made him a lot more he could ever made in premium....i would not be sorry for this gal.

Thu, 05/26/2011 - 12:31 | 1313499 bam_son
bam_son's picture

amazing i had to scoll down this far to find a rational comment about gamma. Bingo, you got it.

Thu, 05/26/2011 - 11:59 | 1313375 espirit
espirit's picture

Probably a money laundering operation.  The only question is who?

Too many crooks to pick one out of the lineup.

Thu, 05/26/2011 - 11:58 | 1313382 Ese Pinche
Ese Pinche's picture

It was a HEDGE.... not a position.

Thu, 05/26/2011 - 12:02 | 1313398 topcallingtroll
topcallingtroll's picture

You are probably right. Somebody has a huge hedgebook so that these potential profits were too insignificant to realize.

Thu, 05/26/2011 - 12:20 | 1313460 arithmeticman
arithmeticman's picture

Owned

Thu, 05/26/2011 - 12:28 | 1313495 bam_son
bam_son's picture

gamma scalping yo

Thu, 05/26/2011 - 12:39 | 1313530 Hedge D. Mon-ey
Hedge D. Mon-ey's picture

Wow. Everything is a conspiracy. Or a shitty trade. Having been in "the trade", there are many possibilities around such a trade without it being a nefarious attempt to break the silver market. Heck, it may be a legitimate bit of good luck by a trader with some cojones and nice timing. Face it: "one million dollars" just isn't that much to take a flier on something. I've seen it done many times. And if you just think looking at this single position can give you confidence in how it worked for the trader, you are dreaming. Frankly, the big guys rarely show one executing house the whole picture anyway. So much energy on guessing........

Thu, 05/26/2011 - 12:56 | 1313587 rockraider3
rockraider3's picture

Come on, this has happened to us all at some point or another. Up massively in a position, hold too long, then all the profits evaporate.  Bummer for that dude, but it's all part of the game. 

Thu, 05/26/2011 - 13:08 | 1313637 SuperRay
SuperRay's picture

hey, Tyler, why don't you post that Bart Chilton interview on CNBC yesterday.  Looks like he might actually do something, god forbid...

Thu, 05/26/2011 - 13:14 | 1313649 alexanderstollznow
alexanderstollznow's picture

personally, i am wondering about how ZH has come by this alleged information anyway.  just goes to show how deeply corruption is rooted in the system.

perhaps a criminal investigation should be commenced?

Thu, 05/26/2011 - 13:18 | 1313667 Smiddywesson
Smiddywesson's picture

Here's my guess, I don't know how they took down silver, but parts of the operation were pretty blatent.

That being said, the central banks are acquiring gold, not silver, and gold was pretty resilient during that raid.  In fact, it has been pretty resilient all along.

It's a awful "coincidence" that central banks are all buying gold, all over the world, after 20 years of selling.  We are going on some kind of a gold standard.  The Fed will not bring down the Euro, they are coordinating this together.  They either find an alternative to the current system or face chaos and a loss of power, a gold standard is a likely alternative because nobody will accept paper that isn't backed by a hard asset after seeing the world currencies go under.

My guess is the central banks themselves are inflating silver and then popping the bubble.  They want everyone too afraid of getting killed to consider buying gold when the price goes parabolic.  It is the same game they play with short squeezes in a bull market, by the time the top arrives, the bears are too shell shocked to take the trade.

Thu, 05/26/2011 - 13:35 | 1313729 So Close
So Close's picture

Why do the put option volumes Tyler is showing not match the same at CBOE?

http://www.cboe.com/DelayedQuote/QuoteTable.aspx?ticker=slv

 

 

Thu, 05/26/2011 - 13:41 | 1313754 So Close
So Close's picture

And how can you trade 102k out of 121k open interest and not move the quote box?

 

Thu, 05/26/2011 - 13:58 | 1313791 Downtoolong
Downtoolong's picture

Just another day in the Six Flags Great Adventure Commodity Futures Theme Park. OK, let’s go ride the pork belly roller coaster now.

Thu, 05/26/2011 - 20:42 | 1315051 rich_wicks
rich_wicks's picture

The same buyer made further headlines after he or she generated a 68,294,229,502,717.3% annualized return 4 weeks later.

How could any buyer make a return of 682,942,295,027.173 times in a put option??  This is total bullshit.  That would mean an option sold at $1 would later sell at $682,942,295,027.173.

At a million dollar trade this would mean he was up:

$682,942,295,027,173,000,000

That's a 682 quintrillion.

Who wrote this article?  They're stupid.

Thu, 05/26/2011 - 21:41 | 1315198 Cthonic
Cthonic's picture

That was the peak annualized rate of return on the capital committed to the trade.  A wee bit of sensationalism for a laugh, but not inaccurate.

And just as amusing: for those who recall our post from April 11 in which we highlighted that an SLV put buyer bought roughly $1 million in SLV $25 July puts, well we have an update: as of today, the same mysterious buyer has now made about a 500% return on his or her investment (with a peak of 700% yesterday, or about 68,294,229,502,717.3% annualized).

http://www.zerohedge.com/article/88-slv-shares-outstanding-trade-yesterd...

Fri, 05/27/2011 - 05:07 | 1315735 BlackholeDivestment
BlackholeDivestment's picture

Must have high ''volume... http://www.youtube.com/watch?v=6vXrNsQQ-k4

Do NOT follow this link or you will be banned from the site!