Silver price about to plummet

[sixgun]

@Wonger what have you actually bought/sold 'to hedge your physical stack'?

[Guest]

19 minutes ago, Wonger said:

Yep, ive actually just closed the GBP long and swung short at 1.3310 for a while.

Nice entry.

Current @1.3326: Could be a bit of an over ride as they soak up that tight cluster of retail stops, stops nicely set above 13367 from July last year might live though, let's see how the hour ends, plus there's always NY later to come and spoil everyone's European party session.

[Wonger]

I sold the May futures on the 20th to close out longs and hedge both Gold and Silver physical and then added for net short exposure, flying a bit blind with no updated COT's though, but makes it interesting I suppose. 

[Wonger]

3 minutes ago, RichRock said:

Nice entry.

Current @1.3326: Could be a bit of an over ride as they soak up that tight cluster of retail stops, stops nicely set above 13367 from July last year might live though, let's see how the hour ends, plus there's always NY later to come and spoil everyone's European party session.

Yeah I thought I got lucky and nailed the top pip so I went and made a coffee had a smoke and came back and its ripping me a new ass to 1.3337, this is why I love trading, never knowing where the day ends up and you need to be insane to do it. 😀   

[Guest]

18 minutes ago, Wonger said:

Yeah I thought I got lucky and nailed the top pip so I went and made a coffee had a smoke and came back and its ripping me a new ass to 1.3337, this is why I love trading, never knowing where the day ends up and you need to be insane to do it. 😀   

I know the feeling. Cable is like a schizophrenic crack addicted girlfriend, just when you think everything is all calm and good and she whispers sweet nothings in your ear,  you turn your eyes for a moment...only to look back quickly and see she has smashed holes in the walls, set the house on fire and thrown bricks through the windows. Then she comes back 1 hour later and says "Was only playing around, I'll behave, let's make this relationship work now, I've brought explosives"

Currently back at your entry point, she might behave now or just set the street on fire, but one thing for certain is she will always keep you on edge as soon as you pay her any attention.

Trading is great, I agree, and as for being insane to do it, well welcome, we're all insane friends here.

[Wonger]

Yes and the US equity markets around Christmas were the schizophrenic crack addicted girlfriend's big Sister, I think we had family around boxing day, not sure who though! 😀 

[sixgun]

1 hour ago, Wonger said:

I sold the May futures on the 20th to close out longs and hedge both Gold and Silver physical and then added for net short exposure, flying a bit blind with no updated COT's though, but makes it interesting I suppose. 

So i take it you are short the SIK19 -

You said you could cheaply protect your physical stack by using futures, or at least i got that impression.

For those who are not familiar with this sort of thing, someone who is long these contracts has promised to buy 5000oz of silver to take delivery a short while after expiration of the contract and someone who is short these contracts promises to sell 5000oz of silver.

Most of the shorts don't have silver to deliver. They sell naked - their positions are not covered by physical they hold. They aim to close their position before they would have to deliver. The same goes for most of the longs. They don't intend to take delivery. It is a paper market where no-one delivers or takes delivery. When you don't have to deliver, price can go to nonsensical levels and is detached from reality.

If you are short one SIK19 contract, you have promised to sell 5000oz of silver. This means for every 1 cent silver moves the contract is worth $50 more or less. Price on the 20th March was at least 20 cents higher than today so the short position is 20 x $50 more valuable. So if you held 5000oz of actual physical your loss on the physical silver value has been covered by the increased value of the short contract. If price had gone up 20 cents the short contract would now have lost $1000 but your physical stack would be worth $1000 more.

Most of the members here do not have a 5000oz silver stack. As such going short becomes speculative, even speculative for the member with a larger stack.

So holding long or short contracts is not cheap. You are actually exposed to the risk of significant losses. The lowest risk hedge is to be long a PUT in the SIK19 with a strike price at $16. You have the option to sell the SIK19 with a settlement price of $16. This option goes up in value the lower price moves away from $16.

 Your risk is defined - you do not have to do anything - you have the option to do something not the obligation. Your maximum loss is the price of the PUT - if price tumbles your PUT increases in value and you close out at a profit. The futures contract is not a defined risk and can be anything but cheap if price moves significantly against you.

[Wonger]

They can trade far smaller size with the likes of IG for 5% margin starting at £158 as I explained in June! 

Also they are not only hedged they also receive an income from the cost of carry, a put option will cost them money. 

[sixgun]

15 minutes ago, Wonger said:

They can trade far smaller size with the likes of IG for 5% margin starting at £158 as I explained in June! 

So you are spread betting on IG. Are you betting on the futures or the spot silver? If you are short spot you get a daily credit which is a little bonus.

i would say for average UK speculator, spread betting that is the best way. You can bet £1 a cent (as you know) so it won't break the bank. It is easy to get carried away - it is easy to overreach and blow your account - which is what over 90% of spread betters do. Personally i sell options but i am also exposed to spread betting.

 

[Wonger]

2 minutes ago, sixgun said:

So you are spread betting on IG. Are you betting on the futures or the spot silver? If you are short spot you get a daily credit which is a little bonus.

i would say for average UK speculator, spread betting that is the best way. You can bet £1 a cent (as you can see) so it won't break the bank. It is easy to get carried away - it is easy to overreach and blow your account - which is what over 90% of spread betters do. Personally i sell options but i am also exposed to spread betting.

 

No im not spread betting with IG, I said they can use the likes of IG, Ive already told you that I sold May futures, why do I have to keep repeating myself?

[sixgun]

1 minute ago, Wonger said:

No im not spread betting with IG, I said they can use the likes of IG, Ive already told you that I sold May futures, why do I have to keep repeating myself?

i don't know why you keep repeating yourself. Are you on medication for that?

[Wonger]

44 minutes ago, sixgun said:

i don't know why you keep repeating yourself. Are you on medication for that?

No Im waiting for you to explain why a Put is more suitable when it will cost money in premium as opposed to selling the Future which provides a cost of carry income, but I fear your still quite busy looking around for who Nicholas Rockefeller is and which Central Banks the Rothschild's control! 😀  

As a gesture additional info

[sixgun]

30 minutes ago, Wonger said:

No Im waiting for you to explain why a Put is more suitable when it will cost money in premium as opposed to selling the Future which provides a cost of carry income, but I fear your still quite busy looking around for who Nicholas Rockefeller is and which Central Banks the Rothschild's control! 😀  

You never asked me for further information on the relative merits of options and futures so i'm not sure why you are waiting for an explanation.

As i pointed out futures are undefined risk, going long a PUT is risk defined. You sold the idea of these derivatives as a hedge for physical held. One SI contract would increase risk for members not hedge it.

You came to the forum saying you believe silver will fall into the low $13 range, a level it last visited in 2009. You said you were going short futures (which you can bet on, on spread betting platform, so you could have been dealing with futures this way but now i am repeating myself 😎).

You said you could hedge your physical cheaply this way. Most members here don't know much if anything about futures and you didn't enlighten them about them, so that wasn't helpful especially as you misled members by saying you could do it cheaply (you didn't mentioned spread betting until page 7 of the thread when i illustrated futures are not cheap - and if a member didn't know about IG spread betting what you posted would have been meaningless).

Not long into the thread you came out with the Rothschilds owning China and Russia and that there are pro-Zionist Neocon NSA on the forum. i was hoping i might be labelled as one.

i pointed out some facts that would go against that, like Russia's sell off of US Treasury, the de-dollarisation of Russia, the SWIFT system alternative, the prema sanctions against Russia....(Nord Stream 2, the support of Syria and Venezuela.... and so it goes on). You said John Bolton was laughing when he met Putin so clearly the Rothschilds run Russia.

You posted a series of videos without explanation, some would say these were conspiracy theorist videos. i had seen all of them. i am the forum wack job conspiracy theorist.  i thought i'd test your knowledge. i saw the Infowars interview with Aaron Russo which i knew was a controversial one. i have spent quite some time digging around for this Nick Rockefeller so i already knew that the idea he was actually in the Rockefeller inner circle was unfounded. We saw what happened and the extent of your knowledge.

Hope that helps.

[Shaunbarry]

Silver is dropping in price as the dollar goes up 

[Wonger]

Im still waiting for the explanation of why a Put is more suitable when it will cost money in premium as opposed to selling the Future which provides a cost of carry income when hedging, downside risk in PM's but its not coming is it? I wonder why? What we are seeing here is the extent of your knowledge, not mine! 😀

[sixgun]

14 minutes ago, Wonger said:

Im still waiting for the explanation of why a Put is more suitable when it will cost money in premium as opposed to selling the Future which provides a cost of carry income when hedging, downside risk in PM's but its not coming is it? I wonder why? What we are seeing here is the extent of your knowledge, not mine! 😀

To hedge is to reduce RISK of financial loss.

A (full) SI futures contract is exposure to price movement in 5000oz of silver. This is way more silver than most members here have. i suspect there is only a handful of us have silver holdings this large. A futures contract therefore increases exposure not reduces it. I write.

38 minutes ago, sixgun said:

As i pointed out futures are undefined risk, going long a PUT is risk defined. You sold the idea of these derivatives as a hedge for physical held. One SI contract would increase risk for members not hedge it.

We saw what happened and the extent of your knowledge.

Hope that helps.

Members can read what is written. Keep going you'll reach Australia soon enough.

[HelpingHands]

23 minutes ago, Shaunbarry said:

Silver is dropping in price as the dollar goes up 

@Shaunbarry I've merged your post into this thread of madness.

[Wonger]

A futures contract is not an undefined risk if its hedging something, I shall not reply any further to your nonsense, good bye and good luck sixgun!

[sixgun]

4 minutes ago, Wonger said:

A futures contract is not an undefined risk if its hedging something, I shall not reply any further to your nonsense, good bye and good luck sixgun!

I clearly stated the majority of members on the forum do not have 5000oz of silver to hedge - thus a futures contract is speculation as it exposes individuals to more risk - you are making me repeat myself, it must be catching.

Good luck Wonga or Wonger or Whatever.

[Abyss]

14 hours ago, sixgun said:

majority of members on the forum do not have 5000oz of silver to hedge - thus a futures contract is speculation as it exposes individuals to more risk

Silver weighs to much put into safety deposit box and unless your shadowstack very few people who would ever stack 5,000 oz silver just not practical and have the funds to purchase 5,000 oz silver then gold is a much better option.

Thanks for summing up this thread helping hand " thread of madness" saved me going back and reading what said .

[Shaunbarry]

With silver so low is it a good time to buy @ £11.78

[Tn21]

Yh sure why not if it goes up or down it's a long term play in my eyes, I only ever buy silver here on the forum now

[Shaunbarry]

Why only here

[HelpingHands]

6 minutes ago, Shaunbarry said:

With silver so low is it a good time to buy @ £11.78

[sixgun]

i like buying silver here. Interesting bite sized pieces come up at good prices. In the last couple of weeks i got a rare vintage Swiss of America 5oz round - i wouldn't normally have come across such a piece. i got some Buffalo rounds, a Metalor bar and some Thalers.

For me i get bits and pieces as they appear and the best place for that is the silver forum. i can cost average - sometimes it is more expensive, sometimes less. i buy quite a lot from Ashimo2012 and i have an arrangement with him to collect together 2kg of treasure before sending it. So i can buy just one coin off him, i don't lose any of the great value he offers i might otherwise lose paying for multiple lots of postage.

So  i would say if you see something that you think is value on the forum and you have the spare money ear marked for precious metal, then go for it.