Dear All,
I recently came upon a signature of one of the members saying "Buy Silver, Crash JP Morgan"....The signature linked to an article explaining why this should happen...
So I googled the whole thing and I found a huge amount of blogs, articles, websites revolving around the same concept...
In brief, it is assumed that JP Morgan is cornering the silver market and that they have a HUGE short position in Silver futures and that every tick up causes them to lose money.....As some websites and blogs say, the short position is around $1.3 trillions....Please keep reading because this is very important....
It's been circling all over internet that the physical deliveries of silver skyrocketed and that the JP Morgan short position is extremely in danger and can cause the big bank to go bankrupt or get a bailout...!!!!
Now, let's get down to facts...The silver market is not a huge one when it comes to futures...The standard silver futures contract traded on the NYMEX is worth 5,000 oz and the average daily volume is around 70k contracts...
This means that at current price levels of $29 per ounce, the contract is worth $145k and that the average value of silver traded on a daily basis is around $10 billions...
There are 2 other silver contracts traded on NYSELIFFE, however, they are not as liquid as the NYMEX one...In fact the mini contract on NYSELIFFE is much more liquid than the standard one....The mini contract is 1,000 oz and averages around 7K contracts per day, that's another $200 millions a day...
Now here comes the interesting part....
A $1.3 trillion dollars short position in Silver means $1,300 billions...This is equivalent to 8,965,517 standard silver contracts!!!!! Yes, that's 8.9 million standard silver contracts...!!!!
If I am conservative enough and say that the open interest of all available silver futures around the world in all exchanges (Including ICE and LME) sums up to 4 million contracts, this means that JP Morgan is still holding double that number as a short position....
Conclusion:
In my opinion, THIS IS A BIG HYPE....It's a distribution methodology to induce masses to buy silver while big players and funds sell their holdings...It's just about trying to create enough demand...Just exactly as the newsletters you get every now and then promoting a thinly traded stock who has just moved a decent 300% where you are actually buying the distributed stock from the strong hands if you follow the newsletter recommendation...
I am not recommending to anyone to buy or sell or short silver futures...I am just here to CLARIFY that this hype can't be real given the reality of the silver market and with proven statistics...
Just question it and question everything I am saying before making any decisions...
FYI, I am flat on Silver, I don't have any long or short positions right now...
Regards,
Nader
I recently came upon a signature of one of the members saying "Buy Silver, Crash JP Morgan"....The signature linked to an article explaining why this should happen...
So I googled the whole thing and I found a huge amount of blogs, articles, websites revolving around the same concept...
In brief, it is assumed that JP Morgan is cornering the silver market and that they have a HUGE short position in Silver futures and that every tick up causes them to lose money.....As some websites and blogs say, the short position is around $1.3 trillions....Please keep reading because this is very important....
It's been circling all over internet that the physical deliveries of silver skyrocketed and that the JP Morgan short position is extremely in danger and can cause the big bank to go bankrupt or get a bailout...!!!!
Now, let's get down to facts...The silver market is not a huge one when it comes to futures...The standard silver futures contract traded on the NYMEX is worth 5,000 oz and the average daily volume is around 70k contracts...
This means that at current price levels of $29 per ounce, the contract is worth $145k and that the average value of silver traded on a daily basis is around $10 billions...
There are 2 other silver contracts traded on NYSELIFFE, however, they are not as liquid as the NYMEX one...In fact the mini contract on NYSELIFFE is much more liquid than the standard one....The mini contract is 1,000 oz and averages around 7K contracts per day, that's another $200 millions a day...
Now here comes the interesting part....
A $1.3 trillion dollars short position in Silver means $1,300 billions...This is equivalent to 8,965,517 standard silver contracts!!!!! Yes, that's 8.9 million standard silver contracts...!!!!
If I am conservative enough and say that the open interest of all available silver futures around the world in all exchanges (Including ICE and LME) sums up to 4 million contracts, this means that JP Morgan is still holding double that number as a short position....
Conclusion:
In my opinion, THIS IS A BIG HYPE....It's a distribution methodology to induce masses to buy silver while big players and funds sell their holdings...It's just about trying to create enough demand...Just exactly as the newsletters you get every now and then promoting a thinly traded stock who has just moved a decent 300% where you are actually buying the distributed stock from the strong hands if you follow the newsletter recommendation...
I am not recommending to anyone to buy or sell or short silver futures...I am just here to CLARIFY that this hype can't be real given the reality of the silver market and with proven statistics...
Just question it and question everything I am saying before making any decisions...
FYI, I am flat on Silver, I don't have any long or short positions right now...
Regards,
Nader