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.