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Second Silver Margin Hike In One Week... Is Now Priced In
As vaguely rumored earlier, and largely anticipated, the CME instituted another margin hike, presumably for a broad swath of commodities but apparently focusing on one particularly: silver, this time 10%. This is on top of the 9% margin hike from Monday. If anyone was wondering the reason for silver's swoon earlier (and subsequent jump) was, now it's clear. By now it is becoming rather clear that all the CME does is provide ever better reasons to BTFD. As always, we continue to hold our breath until there is a comparable maring hike for the ES. We may soon run out of oxygen.
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Ummm... que es ES? Here are 137 possibilities:
http://www.abbreviations.com/ES
I like "Enhanced Services" or "Edison Screw".
I'm sitting on physical silver and am long term hold - until we pass $200/oz, then I'll start to liquidate.
The problem with what I see with the current silver hysteria is that the US$ index is being massively shorted and hedge funds are goosing silver. Look into the data... that's what it's saying. The fact is that there is lots of silver available and a lot of misinformation floating around.
We're being set up for a massive, massive market correction when QE2 ends in June where PMs are going collapse due to margin covering in equities. As long as the QE2 pump is active, California could fall into the ocean and the markets will still go up. A massive tsunami hit Japan and the markets rise. Oil is in the stratosphere... and the markets keep rising. Half of the Middle East is on fire... the markets keep rising... Robot trading accounts for 89% of the volume on the NYSE and trades are held on average 11 seconds... what do you think is running the markets?
We are only seeing the closing of Act 1 and it's going to end badly.
Silver is going to surpass $200 in time... but not the way most think. Prepare for a collapse, eventual QE3 in September and the gradual run up of Silver.
<not investment advice>
I agree in your assessment. While buying in all the time in certain "chunks" at opportune times and weekly purchases, I'm holding considerable reserves for the QE2 "end" and no "QE3" official announcement. Then, when the ES market tanks, I buy in at the consolidation end with the remaining capital set aside. Bernake needs the sheep to WANT QE3+... and they will demand it, from there I will be very well positioned. I don't care if there is a crash... I'm holding long term until I can buy farm land outright in this country or another.
I would disagree with your comment of lots of silver readily available though.... it's not.. especially if more and more delivery takes place and liquidation of etf's take place for physical.
B
I've had no issue any time I walk into a coin shop to purchase, or from any of the silver companies (Kitco, for example). I probably should tame my wording a bit.
I never thought that I'd live to see the day that something like this would happen. All of the efficient market theory and economic theory is not worth a rat's ass.
keep in mind that price brings supply, stores that were out or almost out were well stocked on Tuesday (I think) the day that silver hit $50 for a little while, that was the number that brought supply, maybe we hit $50 2-3 times to get more supply avaliable and sold until what, $60, but as long as we continue to rise supply will be brought to market. I have a friend who inherited alot of silver from his dad, he never wanted to sell me any, when we hit $50 he offered to sell me 100 pounds (~1600 morgans) and he has more.
The fact is that there is lots of silver available and a lot of misinformation floating around.
I disagree - I called MONEX earlier this week and they were out of Silver Eagles. They did have Maples and bars - but not that many.
My point is that they had Maples and bars... It may not have been what you wanted, but they had legitimate silver.
What we are confusing is supply chain issues with extraction. There is ample silver to meet demand.
Understood. After buying for several years from the same coin shop, they failed me a few weeks ago and could not deliver. Really opened my eyes. I know I'm in NH and it is an active physical buying area, but still made an impression on me (I read of other shortages but had not see it first hand), as well as the numbers based on etf numbers, manufacturing numbers, vault pm's held ect.. It all adds up to if everyone demanded delivery, there would not be enough... comex default.
Maples or bars make no difference to me, really. If my dealer can't deliver anything at a certain point, there is a problem.... I'll buy almost anything available, and to not have anything was a "surprise".
B
That might depend on how many fo the silver options executed stand for delivery- we'll know soon, but the paper and physical markets are sending distinct signals.
I know that everyone here on ZH is a genius but please forgive me if I find the use of expletives in place of reasoned thinking an indication of - at best- an impaired mind. I've taught adolescents for years and I can guarantee you that there are no remaining creative, original uses of fuck and shit and pussy. My suggestion would be that all of you who can't get beyond this kind of mindless ranting STFU and let the adults have a conversation while you listen and perhaps learn. Otherwise just keep on masturbating and calling it sex but please spare the rest of us your meaningless verbage.
Feel better now that you've done your good deed for the day? <cue rolling eyes>
i value the free speech, here.
and the fight clubbing.
i had a little problem w/ you telling that new guy who went full evangelical that his rant didn't belong here. not much of a problem, Z, but a problem; i could understand your "point" but if someone wants to hang his ass out the zeroHedge window, it's his ass, right?
americanspirit wants zH's to STFU if they don't want to follow his rules. so, he's had his say, too, which is fine. he owns his personal values and expresses them, here.
this site = free speech. yay!
our gunslinger friend din't break any rules b/c there are no rules.
and the people who "slandered jesus" didn't break any rules b/c there are no rules.
so fuk everybody in the ass with reflation and no vaseline.
americanspirit
please forgive me if I find the use of expletives in place of reasoned thinking an indication of - at best- an impaired mind.
My suggestion....STFU
Eliminate margin entirely from the silver market. The noise to signal ratio is getting too high.
Call me a conspiracy driven cynic – but IMO this Screams that somebody is in BIG Trouble! My Dream is to walk in some morning and see Treasuries ALL Limit Down and silver up about 10 – 15 Dollars as the Chinese send a Loud and Clear message to the FED that the Jig Is Up – that they are no longer going to sit by and watch their investments decimated by the FED’s debasing of our currency – and that the FED is no longer the biggest Fish in the Little Pond! I would LOVE to see an outright dollar crisis, JPM take it up the ass and take them along with the FED Down! What is the ultimate in gall - is that Timmah has the Balls to call China a currency manipulator. Fuck - the FED is the Biggest Currency manipulator on the planet.
Hey All,
I have a small speculative position in AGQ. Is that thing going to implode or explode in the event of a CRIMEX default? Curious to hear anyone's thoughts on AGQ and how long it has left to live.
You guys should be cheering for more margin hikes.
Like I said, the higher the margin requirements, silver will rocket up even faster. The shorts are more heavily exposed to margin risk than the longs. The longs keep selling out, scared of a correction, and then jump back in. Longs are way too scared to chase the tape at these levels, whereas the shorts are trying to "make their year" using huge leverage to score all their gains in one month so they can take the summer off at The Hamptons.
By the way, the exact same thing is happening with QQQ and SPY.
makes sense...
Someone on here stated a few days ago that nothings eats through margin like a large short position. Makes sense to me.
I have personal knowledge of 3 contracts worth of silver that will not be available for loan after today. Every little bit, eh?
When silver was worth $9 an oz. 5000 oz. /one contract,was worth $45000.
Now, one contract is worth $235,000. The margin has to go up to keep everybody from getting overleveraged.
Particularly when the market gets volatile. The exchange is the clearinghouse. If traders put up plenty of margin ahead of time, it will lessen the chance of a precipitous selloff due to margin calls.
Volatility has been on the rise in the silver futures lately.
I notice that margins went down in the milk futures tho...
Maybe some of the silver traders that are whining about the steep margins can trade milk!!
gh
milk futures went down because it's radioactive ongoing.
Yeah i remember thinking about buying a contract when it was six dollars an oz and how risky it seemed at the time.
anyone know if you can do a exchange of silver for gold without a taxable event?
would like to know, but please only respond if you know what your talking about
Only in a self directed retirement account.
Or if you have friends and can gift them the silver. They have a stepped up basis. They sell the silver, buy gold, and then gift you the gold. Stay within irs gift limits and follow the tax law.
A less legal way is to put an add in the paper and sell your silver, then convert cash to a money order and buy gold thru cni or apmex. They will explain to you the amounts which trigger an irs report, but those amounts are generous and you can split your buys with several different gold sellers.
Oops...there are low thresholds for snitching you out for cash purchase money orders. I think it is 5000 but they may have lowered it. Find out the reporting threshold and buy from several different places below the limit.
This is merely for educational purposes. I dont condone any actions which might harm our incompetent socialist dictatorship.
In what country? LOL The Swiss can do it legally for any quantity they want, in cash. I bet Russians and lots of Asians can do it quite easily too, taxes be damned.
"sell in may & go away."
LOL---the shorts have already sold! will this year be just another summer cycle, or is this market maybe not quite the standard fare? the cash value of 5,000 oz of silver is now over $240,000.
how many contractz would you like?
A GSR of 31.77 be intolerable.
Don't be silly. ES is much less volitile than commodities, especially silver right now, so it can get by with lower margins. COMEX could care less what the price of silver is. They have to hike margins on futures with crazy vol in order to protect themselves and the integrity of the contracts. This move actually costs them money becuase it will mean fewer contracts traded and less revenue from exchange fees.
The fact is that when something makes a superspike like this, it is highly likely to reverse hard with limit-down days and retrace the majority of the vertical portion of the move. Good silver traders should be glad that they are making sure that winners can continue to get paid, and shouldn't be trading on such thin margin for this to be an issue.
For true believers, though, the pure-play silver producers haven't gone crazy like the metal, so they're priced for killer cash flows in 2011 if silver stays over $25. Here's a spreadsheet of primary silver producers on my site that allows you to sort by various mining profitability and resource value metrics:
http://miningalmanac.com/stock-lists/silver-mining-companies
A silver producer index chart:
http://miningalmanac.com/silver_producers
the implications of this are staggering. Consider that PM's as a % of global assets under management are still under 2%. THAT'S why iShares is selling another 50 million shares of SLV, because by the time this bull is done gold will be above $4000/oz and the gold/silver ratio will be AROUND 10:1. Face it, even though many of you have only just started buying/trading silver in the past few years, you are way early compared to your fellow neanderthal. And for you geniuses who started buying between 2001 and 2004, well, get off your a$$ and start milking the bagman for all he's worth. Sitting on physical is great, but the real game is leveraging the paper and using the profits to buy more physical. THAT'S how you checkmate the jp morgue men. I've been at this for years. I learned how to print money like the banksters. It's called leverage and risk maagement. Easy to say, hard to do, even harder to learn, but I did it.
While some are ranting about the ponzification of fiat currencies, others are using their knowledge of this ponzification to further increase their ounce size, or "ouncage". Balls of steel are real. How heavy are yours?
Hedge funds extort the rich by charging 2-and-20 and still can't do what I do. I used to work at a hedge fund, the head PM was a facking moron who thought silver belonged on his wrist. He used to make fun of me everytime the idiots on CNBC would make fun of Peter Schiff! Now, I think he has an ulcer, and it's probably starting to eat him alive.
Hope you guys have a plan to make more money and buy more food/supplies/lead/physical Ag. You know you need more money right? As the rate of inflation increases, the rate of awareness/awakening amongst the population increases which leads to a vicious cycle of increasing inflation expectations which eventually prices out everyone, except those who are using leverage to benefit from the increasing inflation expectations. Just buying physical on dips may not help you, as you may not be outpacing the general price increases across the broad goods, services and taxes spectrum. I know of what I speak. Think Weimar + Argentina, but global with a Gompertz tinge to it. On a longer-term timeframe we are on the cusp of liftoff.
Now that I'm getting REAL confirmation of the lid coming off of their years of fraud and price manipulation, I am bringing my talents to the public. I am annualizing an 800% return right now. In February I was up 30%, March 40%, this month I am up 60%. These returns are compounding. I have outperformed silver by a factor of 4-to-1 over the past 3 months. If the silver market were to crash 30% over the next 3 trading days I would not worry nor suffer. I have done alot of time in the silver trading dungeons and I am prepared. I am not mickey mouse, I am a risk manager. Call me a Plumber even. Unlike Jesse Livermore I will not repeatedly lose all of my capital and commit suicide. Twice was enough for me, I had stopped taking risks like that by 2006. The sulfuric solution to this murderous silver market is being brought to the plebeians by a master of oxidization.
You can autotrade my signals via your own brokerage account, or you can just receive the signals. Any capital size above $10k is fine, the site auto-scales the orders. There's a free trial so you can watch and get comfortable. My next step is to take a business public that specializes in storing and delivering assayed silver all over the world. Believe it or not, silver is about to become a rare earth element. Sounds wacky? So did $49 Ag in 2002 when it had been trading between $4 and $6 for the previous 15 years. Methinks getting your hands on physical silver will become somewhat of an impossible task in a few years. I know everyone says that, but I'm talking about when the only silver available is in heavily guarded warehouses. YOU will sell it to them because they will offer you a price you can't refuse, right before it goes from $250/oz to $1250/oz. Me also thinks that those of you hoarding it now are on the right track, but you need MORE. The price is going to 3 digits, and then eventually 4. Meditate on the broad and highly applicable physical properties of silver and the coming wave of technologicalization via release of suppressed patents and technologies. If everyone thinks the world is going to end and go to anarchy, wouldn't that be classified as the "retail sentiment?"
Hi ho silver, ZH'ers...
http://silveroptions.collective2.com
As a minor buyer since the 90's....cool!
I'm mostly a grain trader. This may be perhaps why corn was limit down today. Most other grains also sold off heavily. It caught many by surprise. Much of it was likely fund selling. Agrimoney.com suggests that the dip may not last long, especially since high crude and weak dollar are supportive of grain prices. Weather has also been poor, stressing the winter wheat crop and causing delays in corn planting.
For the sake of our food supply, let's pray for good weather. Otherwise, the inflationary meme we've seen in the past six month may pick up steam even faster.
My partner and I will be passing an 'X' kg milestone soon, and since this is a Keynesian Endgame, we really couldn't give a Rat's-Ass what the CME does or doesn't do.
They're only keeping them alive to the 12th Round, where they'll all have Keynesian Stroke.
nice name