Going off memory so don't quote me: Most funds are not anywhere near 1 billion in size, most are a few hundred million. But let's say a fund was 1 billion, typically the positions sizes are limited to 1 to 3 % of the fund so 1 to 3 million of that fund is allowable into one investment. Divide 1,000,000 by 85,000 controlled per contract gives you about 25 contracts traded. I think for math purposes this is how they calculate their position size..This is what I see most of the times (25) but the really big guys will do trades of 100 contracts or more which represent probably less than 5-10% of the trades.
Bullion banks would definately have to hedge their positions . So, they may sell a contract to collect premiums and use those premiums to take the actual position they want.. I'm not an expert on hedging, just pointing out the picture is more complicated than painted. Silver has moved $3 since march, just do the math on what a held short contract pain would be like if they held the position the whole time Yes, overnight margin is roughly half of the day margin. Trading futures is what allowed me to develop the accuracy in my price levels.
There is a mini contract that only gains or loses $10 per 1 penny if you want to start out small...YI is designation
I would just add one thing, maybe not for you but for others as education. Commercial short positions are at a high. The problem: pundits who write about the commercials and speculative positions do a disservice by failing to speak about the hedging. One silver contract, controlling 5000 oz of silver (worth $87 K) only requires margin of roughly $6500 to trade/ control it. But for every 0.01 move in silver, this equates to a $50 gain or loss on the contract. The pundits would have you believe that commericials are not protected and "some day" they have to cover their shorts. Well, if silver moves against by 100 cents, that's $5000 a contract and a,80% of your original trading position is wiped out with the holder having to re anty up to keep the margin position min $6500. On average, I see positions per decent size trader of at least 100 contracts but generally more , so holding those 100 contracts when silver moves against you would be $500K loss for 1 dollar move.
What happens in real life is the contract just rolled last week or switches, so those contracts that had been held short or long all expired and had to rolled into the new front month of July. Now some may have sold the old contract back month contract and taken out the equivalent new front month contract, that's entirely possible but I illustrate this point to educate, that commercials arent' sitting there holding short contracts forever and sweating. The contracts last roughly only 3 months. They take out option hedges or other hedges with the contracts. The funds have risk managers that will make them force liquidate their positions if it goes against them.
Now, there is a percentage of those commercial short positions that is unhedged, and pundits writing about it on these sites wouldn't have a clue on how to figure that out. Some have missed the entire move since Jan watching the COTS.
Yes, consolidating now and in limbo after breaking through price points and reversing both bullish and bearish. $17.44 on the top and $16.821 on the bottom. cant help but notice a 4 hr candle bearish H&S . The Miners broke some price levels yesterday to me saying they are still bullish
As I wrote Fri Morning:
The bearish...takes over on a 5 min close below $16.956, ...downside initially limited to $16.821... bullish trend takes over the second the price moves above $17.285... DXY, 94.47--- gets to that number and silver starts to get very bullish at the same time, the market is anticipating the bullishness in DXY is stalling. If DXY gets to that but silver starts getting weak, the market thinks the dollar will bounce higher on its bearish bounce
"SLW too many shares and a tax problem"...I haven't owned SLW for a very, very long time. I always wondered when the Canadian Gov would go after the Cayman setup. Didn't know they had over diluted, thxs. This board was always just a proxy for having Silver discussions for me.
Thanks and Hey there to you dbtunr, yours was one of the first names I saw that i recognized, but wasn't absolutely sure it was the right spelling. Your as old time as it gets, both of us are:) its coming up on a decade and a half for both on us posting here.
CME, yes, just like the gravitational effects on Earth are a function of the moon, other planets, the sun, with lesser affects due to other galaxies etc., so too are the PM prices a function of many things. For me recently, the biggest factors worth watching were are the ones I mentioned. And as always, if there is a general market sell off of severity, we've learned over the years, everything gets sold including PM's.
Fundamentally, you cant ignore the currency interventions going on with the Yuan, carry unwind in USD/JPY, negative interest rate news (which was one of the biggest things bankers used against gold -no yield, but now accounts are at neg interest rate) and bonds.
I was stunned $17.44 failed to be honest, it's the first time since Jan that such a signal failed. From what I can tell, silver is trapped between two fighting trends, one bullish and one bearish. The bearish one takes over on a 5 min close below $16.956, but downside initially limited to $16.821. The bullish trend takes over the second the price moves above $17.285. The fact that over night the bear tried to get down to $16.821, but the 5 min didn't close below $16.956 is bullish, it says to me bulls have gained some momentum.
My eye's are trained constantly on the DXY, 94.47. If DXY gets to that number and silver starts to get very bullish at the same time, the market is anticipating the bullishness in DXY is stalling. If DXY gets to that but silver starts getting weak, the market thinks the dollar will bounce higher on its bearish bounce.
Hey there HBrown, thanks, I hope all has been well with you. I hear you on the board not being what it used to be. This is the first time I've posted on a board in a few years. I imagine it's only got worse on this board since days past. But in general society has become less civil.
Thanks Raganrokdg, let's cross our fingers that it has completely and finally turned.
Good Day to you Cmegladon, yes a long time. I am well and I hope the same for you and your family. Glad for you on the performance, I guess we were due with the miner portion of our portfolio after whats happened these last few years. The $17.44 is something I was only able to calculate based on the last 10 days worth of data points. Great minds think a like I guess with Endeavor. Right now, I'm not tracking AU as much as monitoring: DXY correlation to Ag; how USD/JPY + S&P 500 correlate to Ag; $gold:$silver ratio breakdown in April; and, XAU and HUI.
The longer Ag stays at this $17.44 price, the stronger the case it's a base, however I'd like to see the price stay above it for 4 to 6 hrs continuously. Futures contract rolled on Friday, so everything is fresh and ready to go.
I imagine all of you have learned your fare share over the years on trading strategy, so i'll drop by from time to time to see what the general thoughts are.
Whatever happened to I think his handle was YDM, an older guy closer to 80 yrs old now, he'd had heart surgery I think, anyone know?
Hi Ladies and Gents,
I haven't been here for a very, very long time. I see some of the old gang so I thought I'd make this post for them.
Happy days are here again because the prices seem to be operating normally again, both bearishly and bullishly. I have vastly improved my modeling accuracy, and for old times I'll share. This move begins at $14.01 Ag back in Jan 2016...
I've tweaked my models to determine higher probability entry points. The ahighest probability entry point is one where shorts have thrown in the towel on a bearish position: This is a Bear Stop Price. If by 6:00pm today the price closes above $17.435 by even $0.001, the bearish correction started on May 2, 2016 is finished because the bear stop has been triggered. $17.435 is a powerful price point to get long, it becomes a floor.
What's in store? The old time traders, using Inverse Head and Shoulders price targets will be looking to $18.581 Ag. What's interesting about this price is my model gives one price of $18.567 which if closed above, on a 5 min bullish candle says, there's a 85% chance $19.854 is the next target.
My proxy equity is Silver Standard. Typically if SLW gains 3% in a day, SSRI will gain a couple percent more. Endeavor is my high risk play, it gain 200% on this move compared to 100% on Silver Standard.
My Short S&P obviously failed at the stop I indicated. I re-shorted here at 1939 (not using futures on this it's too risky, I'm using volatility through canadian etf, so I'm long volatility since the S&P hit 2012'ish)
Batting 0 for 1
Half of my dollar short position was stopped out at 85.35, the last stop is 85.97. Above that stop the dollar is bullish again, for whatever reason (people fleeing to the safety of the dollar:)
Batting 0 for 2
I have silver long stopping 17.129 or lower on Dec contract. The price didn't trigger as I outlined at 17.731 to get more long at $17.671 but the intraday price yesterday to $17.653 was only 1.8 cents shy. That means the numbers are still relevant. If by 11:00 am silver finishes above $17.249 my stop changes to 17.220, and I get more long silver at $17.249.
Batting: jury's out but not looking good
I have silver standard long stopping for SSRI USA equivalent of $5.63
Batting: jury's out but not looking good
Looks like I suck. Here's the thing bottoming or topping isn't usually a specific time, but more a process over time. My rules say the reward far outweighs the risk, so take the position and stop out if necessary but then get back in if you get a signal. I might get stopped 3 to 5 times before I step back because the reward on the potential trade being right will wipe away all of those stop losses easily. However, you have to be in it to win it. I'll always be long some volatility because I figure one day we'll wake up and the S&P will have gapped 50 to 100 points overnight down, and all those thinking they could time a top will be chasing. At these levels I'll always be long some cheap silver miner calls dated out 3 mths or more. I'm looking for an October surprise.
Please, and at your truculent discretion, in moderation or in excess as you so choose, partake in lip-locking a non-gmo goat phallus, either hairy or clean shaven to suit your immediate needs:) I suggest non-gmo since I imagine your copious consumption of gmo foods has caused some mis sequencing problems in your RNA.
Enjoy the sausage and milk buddy.
Whazzup guys and girls.
S&P 500: I've added more shorts at 1895.65 stopping 1897.65 five minute close or higher.
Silver: 5 min close above $17.731 Dec Silver, triggers taking a long position at $17.671 stopping out $17.609 5min close or lower. This price trigger kills bearish move downward in effect for what seems like years. It's tricky through that price area because silver may pause at $17.82, pullback some, before taking off, or it can just blast through $17.82.
i don't play silver wheaton much anymore, mainly silver standard resources. for whatever reason if SLW is up or down 2% in a day, SSRI will be up or down at least twice this amount. Daily close above $6.43 CAN is SSO indicates it is a long position. For the last 3 or 4 trading days the price has been jumping around this 6.43 price making higher lows.
US dollar index is a lock bearish to 84.24 and if lucky 83.97.
I observe no leadership when comparing the miners to the metal. It seems some days the miners lead and some the metal leads. There is no reward in risk:reward analysis of taking short positions here. Long bear minimal risk and shorts bear greatest risk. Saw a 5000 contract volume 5 min positive candle close a few days ago and haven't seen one like it since Aug 2013 before the 20% move.
I haven't been around for a very long time, so something must have brought me back. Yes, I adopted my system for the S&P and it's been pretty accurate.
Ladies and gentleman, pay very close attention because Mr dbtunr was one of the first investors in SLW maybe a decade or so back when I first got involved with this board.
Good to see you again!
I have a handful of contracts I'm holding, but I have a lot of cash I'd like to buy more shares with, I was hoping for lower prices in the low $21.xx silver area.
Here's the key info:
Start date End date Underlying symbol
01-Dec-12 22-Feb-13 Comex® Silver March 2013 Futures SIH3
May 2014 is about to take over.
Spoofing is that illegal practice in trading where a market participant adds a order to the bid/ask structure and then immediately cancels it. Why? the price moves towards liquidity by my observation. When the price in silver looked like it was about to run, an order for 1025 contracts appeared for 1 sec at lower prices then disappeared. 1025x 5000 oz per contract x21.87 current silver price puts it near $110 million leveraged order.
I have never seen an order that big on the SI (silver) contract. The largest I've seen is about 500.
Some really big money is here folks, really big.
I'm not even trying to trade my position now, I just want to add to it, but I'm not sure it's going to go much lower. Today was a key reversal in bullishly in silver standard resources and if it weren't for the expiring contracts in silver I'd say today was a key reversal bullishly for it too.
Feb Silver Futures don't have value.... I am not attacking you.... Just trying to share knowledge.
A Futures contract that means something is one that dictates the price from now until roughly 3 months into the future. How do you figure this out? Go to the one where billions of dollars are playing not millions.
While we were in Dec, Mar is the contract that dictates the price action.
While we were in Jan, Mar is still the contract that dictates the price action.
While in Feb and up to a certain date 2/3's of the way through, Mar is still the contact that dictates the price action.
in Feb, the march contract expires and all the money moves to the next long term contract which is May- called rollover. The prices in the remaining part of this month, in march and in april will be dictated by the May contract.
Whereas between 2000-7000 contract volume in open interest might participate in Jan or 2000-7000 in Feb or 2000-7000 in April, representing $0.8 billion dollars in silver max in each of those months, the open interest in March and May represents 100,000 contracts or leveraging $10.9 billion for each of months of Mar and May.
trying to be helpful...but depending on writing style and interpreting abilities.. often misunderstood..
Hey Cgreens, Call_me_dudee, All4reel,
Good to see you guys still around. That was some beating silver took for the last several years. The fact that you (and I) are all showing up at the same time to this old board suggests a number of different types of investor have had signals trigger all suggestive of the same thing...silver looks like it's ready to roll again.
This morning I woke thinking I was going to sell some, but saw some things that suggested I should use a different approach than targeting a sell point -use a trailing stop. It's worked out for me. I have less than a handful of contracts in the low $20.20 area. Monster day for me!
My gut feeling is that silver is trying to go after $22.065 (this isn't a calculation) just eyeballing it. It is signalling a monthly trendline breakout, has signaled a weekly, daily, 240 min and 60 min breakout, so all types of money of different duration has been jumping in. A LOT of traders wanted in and didn't get an opportunity. The chatter is that since silver has underperformed everything (gold, silver miners) that it has the most upside and we saw that today with a 4:1 gain silver:gold. Call option guys seem to be looking for this move to last at least several weeks. I'll be monitoring ticks on 5 min charts to figure out when a real pullback has started and lighten up then in preparation for what will likely be a short correction and vault further up. Today, one tried to take shape but easily broke down.
Volatility next week should be murder with the roll over.
I changed my mind, I won't sell some of my position, I'm going to have to figure out a stop.
I only got 2/3's of the contracts I wanted but who's complaining.
This breakout is incredibly strong and I can tell you it telegraphs ( for the young people look it up, it was the first internet..) significantly higher prices. If is really amazing that it happened before end of day today, because next week rollover from march to may would begin to accelerate.
For any target's I had, silver has far exceeded them by about 15 cents, Also I wrote in an earlier post the pit traders were looking at around 1313 in gold, and I had $1318, well the so far high is 1319.60. Yesterday, there were a lot of folks shorting at the CME close, some of them are caught this morning. Poor guys, I know what that feels like.
I'm llooking to selling 1/3 to maybe 1/2 of my position up here and looking to reload some lower..It will be tricky, silver was held back hard while gold and silver miners were rising and you can see what's happening now, it's up 3x to gold's gain The signal to sell will start on a 5 min chart. Every 5 min chart gives way to the dominance of a 15 min, which gives way to hours, then days, then weeks, then months.
I know it's early in the month, but silver is putting in a monthly breakout on the chart. Last time this happened was 1 yr ago, and the run was $5.00. Also, weekly chart is putting in signs of a breakout that also reveals previous $5.00 move.
The problem: where it sits in relation to March contract expiry on Feb 22. 30% of the open interest has gone to the back month (May) and with only 70% of the ammunition available in the current month, can silver muster enough to break some key price points. History says no. Typically, there are 2 to 3 fake out's and they will occur next week if this thing can't pop before this Friday.
Gold taps $1299.7.
Who knows the reason, but silver pulled gold up today and everything else.
Meanwhile, the miner's are rolling over (if you take SSRI as the lead indicator). Money is trying to break this long miner short metal trade and
Silver only needs crack $20.504 or greater on a 5 min close and bulls will have complete control. If this happens I add a few more contracts in the low $20.4x's. If that close on the 5 min happens my next targets are at the $21.00 even level or just slightly before. However, this bear has gone on for so long and to such oversold levels some overshooting to the upside is necessary to balance out the picture.
I should point out one other thing, in case anyone has bought Silver Standard due to my posts. It is at it's exhaustion point. The only way I keep it moving forward is if it closes above $9.57 US. If it doesn't, I sell it, and if tomorrow it gets above that price, I look to re-establish the long position.