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Thread: So if everyone takes delivery, is there enough silver to cover?

  1. #1

    Smile So if everyone takes delivery, is there enough silver to cover?

    So if everyone takes delivery, is there enough silver to cover?
    "Compulsory altruism is none too altruistic." - me

    "All of us necessarily hold many casual opinions that are ludicrously wrong simply because life is far too short for us to think through even a small fraction of the topics that we come across." -- Julian Simon

  2. #2
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    Quote Originally Posted by windweaver77 View Post
    So if everyone takes delivery, is there enough silver to cover?
    That may be a better question for another thread. I was talking about the price movement of a paper ETF called SLV. Nobody takes delivery of anything. The ETF buys and sells "baskets" of silver based on the buying and selling of shares. When x many shares of SLV are sold they sell physical silver and when x many shares of SLV are bought they buy physical silver. The holder of the SLV shares will never see an ounce of silver and the shares cannot be redeemed for physical silver. The purpose of the ETF is to try to reflect the current value of silver. But it never can be 100% because some silver has to be sold off to pay for the management of the ETF. That's why there is a gap between spot and the price of SLV. That price difference has already been eaten up by management costs. Theoretically SLV will go to zero if silver prices continue to fall and then level off for years. The expenses will continue to erode the ETF until it is all gone. That's why SLV is typically used as a short term hedge to be bought and sold not a long term investment to buy and hold forever.
    Disclaimer:Later....

  3. #3

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    Quote Originally Posted by Count Stacula View Post
    That may be a better question for another thread. I was talking about the price movement of a paper ETF called SLV. Nobody takes delivery of anything. The ETF buys and sells "baskets" of silver based on the buying and selling of shares. When x many shares of SLV are sold they sell physical silver and when x many shares of SLV are bought they buy physical silver. The holder of the SLV shares will never see an ounce of silver and the shares cannot be redeemed for physical silver. The purpose of the ETF is to try to reflect the current value of silver. But it never can be 100% because some silver has to be sold off to pay for the management of the ETF. That's why there is a gap between spot and the price of SLV. That price difference has already been eaten up by management costs. Theoretically SLV will go to zero if silver prices continue to fall and then level off for years. The expenses will continue to erode the ETF until it is all gone. That's why SLV is typically used as a short term hedge to be bought and sold not a long term investment to buy and hold forever.
    Let me get this straight...

    You cannot under any circumstances take delivery ever? What kinda game is this?
    "Compulsory altruism is none too altruistic." - me

    "All of us necessarily hold many casual opinions that are ludicrously wrong simply because life is far too short for us to think through even a small fraction of the topics that we come across." -- Julian Simon

  4. #4
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    Dec 2013
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    Quote Originally Posted by Count Stacula View Post
    That may be a better question for another thread. I was talking about the price movement of a paper ETF called SLV. Nobody takes delivery of anything. The ETF buys and sells "baskets" of silver based on the buying and selling of shares. When x many shares of SLV are sold they sell physical silver and when x many shares of SLV are bought they buy physical silver. The holder of the SLV shares will never see an ounce of silver and the shares cannot be redeemed for physical silver. The purpose of the ETF is to try to reflect the current value of silver. But it never can be 100% because some silver has to be sold off to pay for the management of the ETF. That's why there is a gap between spot and the price of SLV. That price difference has already been eaten up by management costs. Theoretically SLV will go to zero if silver prices continue to fall and then level off for years. The expenses will continue to erode the ETF until it is all gone. That's why SLV is typically used as a short term hedge to be bought and sold not a long term investment to buy and hold forever.
    Very interesting! I have enjoyed both of your inputs on these questions. -Joshua Slane

  5. #5

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    Another thread ... :: sigh:: Here we go again...
    "Compulsory altruism is none too altruistic." - me

    "All of us necessarily hold many casual opinions that are ludicrously wrong simply because life is far too short for us to think through even a small fraction of the topics that we come across." -- Julian Simon

  6. #6

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    kinda explains the 4x silver price leap with the creation of Silver ETFs.

  7. #7

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    Quote Originally Posted by windweaver77 View Post
    Let me get this straight...

    You cannot under any circumstances take delivery ever? What kinda game is this?
    It's like entropy.

    • You can't win.
    • You can't break even.
    • You can't quit the game.
    Legal Disclaimer: I am not a doctor, nor do I play one on TV.

    "It's tough to make predictions, especially about the future." -- Yogi Berra
    A variant of this has also been attributed to physicist Niels Bohr, and others.

    "Tis against some menís principle to pay interest, and seems against othersí interest to pay the principal." -- Benjamin Franklin

    The School of Hard Knocks is where you get the lesson after you fail the test.

    Book title: "The Best Way to Rob a Bank Is to Own One"

  8. #8

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    Quote Originally Posted by windweaver77 View Post
    So if everyone takes delivery, is there enough silver to cover?
    Simple answer. No.
    Utah, Get Me Two!

  9. #9

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    If "Everyone" were to attempt to take delivery of say 20 ounces of Silver, no there is not enough supply and the sky's the limit as far as price and valuation. As for SLV and the others, they are not Silver they are ETF's they are just a way to trade and monitize an idea with a commodity as the basis for pricing the people who buy SLV want a trading vehicle, they do not want Silver. If you want Silver buy Silver, the thing is not everyone wants Silver and that's part of the reason we see low prices and valuations.
    Last edited by SilverShareHolder; 07-21-2015 at 10:35 AM.

  10. #10

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    Quote Originally Posted by Count Stacula View Post
    That may be a better question for another thread. I was talking about the price movement of a paper ETF called SLV. Nobody takes delivery of anything. The ETF buys and sells "baskets" of silver based on the buying and selling of shares. When x many shares of SLV are sold they sell physical silver and when x many shares of SLV are bought they buy physical silver. The holder of the SLV shares will never see an ounce of silver and the shares cannot be redeemed for physical silver. The purpose of the ETF is to try to reflect the current value of silver. But it never can be 100% because some silver has to be sold off to pay for the management of the ETF. That's why there is a gap between spot and the price of SLV. That price difference has already been eaten up by management costs. Theoretically SLV will go to zero if silver prices continue to fall and then level off for years. The expenses will continue to erode the ETF until it is all gone. That's why SLV is typically used as a short term hedge to be bought and sold not a long term investment to buy and hold forever.
    Why didn't we think of this before? A thread for talking about imaginary silver!

    It now has a place all its own.

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