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Thread: Want to take delivery from the COMEX?

  1. #21

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    This is an interesting story which sheds some light on how the COMEX operates. This guy now owns five specifically-identified 1000oz bars of silver from COMEX, which cannot be sold or traded without his consent. I guess, since he cannot take possession, these bars of his will simply sit in the vault? I suppose these bars are now in the "eligible" category at COMEX until he wants to sell and they become "registered."

    I expect he will now be subject to storage fees or similar ongoing charges, prompting him to sell the bars on COMEX? I'd be interested in learning what his alternatives are and how to engage them - this story is only half over.

    I would add that I believe his frustrations with his online trading platform may be a red herring and not so much a reflection on the operations of the COMEX. Either he was not knowledgable enough on how to execute this trade, or his platform was inadequate for the task (as they, too, had never done this before) Anyway, I think it's the outcome of his trade that is most interesting here.

  2. #22

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    Quote Originally Posted by and4rik View Post
    Maybe a better question would be if there is a way to sell a bar to comex.
    The authenticity of the metal comes into question once the chain of custody is broken from the "good delivery bar" source.
    I can understand not wanting to sort through that quagmire and it is the driving force behind my own decision not to deal with any bars of metal.
    Thomas Jefferson is credited with writing, “When injustice becomes law, resistance becomes duty.” The seceding states in the Civil War period issued a similar declaration using the word “tyranny” as opposed to “injustice.”

  3. #23

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    There is a way to take delivery and make delivery with the COMEX. To get the exact rules you can look at the COMEX website. What we have here is a case of a person who didn't do his homework so to speak before proceeding with the naive thought that taking delivery was a simple case of having 5000 x POS in his account and pressing a button on the keyboard. Now he knows about the 10% variance needed, he knows to use a different broker next time, one who's got the paperwork in place to take delivery. He's still to find out about the storage fees for each month it sits in vaults COMEX pays security for, costs of transfer from COMEX vault to COMEX approved receiver vault(they don't deliver to your home), costs of transfer from receiver vault to your own place of storage, costs of storage. All of this could have been known beforehand with 15 minutes of homework. He and we have had a learning experience from this case.

    Making and taking delivery with COMEX is done with silver and every other commodity they offer everyday. The specifications differ from one commodity to the next. Silver I know from experience the rules and costs. If I was a farmer making delivery of wheat, or a consumer taking delivery of wheat....things I have no experience with, I'd expect that there's also a variance, and also specific grain warehouses, and also costs of transfer to my storage. I'd spend 15 minutes looking up the wheat specs on the COMEX website.

    Whatever the costs are, realize the COMEX is not designed to make or take delivery of 5000 bushels of wheat or 5000 oz of silver in a cost effective way(There are transit costs at least in taking, making delivery). It's doable, but at a somewhat greater incremental cost per bushel or ounce than taking, making delivery of 100 contracts.

    Edit: The oil experience last year that Silver Palm wrote about is a great example of the unexpected happening. I don't think anyone thought previously that futures could go negative, to such a large extent. There were briefly some longs who paid $35/barrel to have a contract taken out of their hands or else I guess they would have been on the hook for the liability of storing oil when there was no place to store it at anything close to a reasonable price.
    Last edited by insidedealer; 12-13-2021 at 05:49 PM.

  4. #24

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    I had bought one from Tulving at 9 cents over spot, free shipping. It was 1066 ounces and spot was about $14 at the time. (probably 2009).
    Since sold it, probably spot -.40-.50 cents or something. Sold in 2011 or 2012.

  5. #25

    Default

    I'll take 4 tons of wheat to apartment 4B please. LOLZ!

  6. #26

    Default Grasshopper still learning here

    Thomas Jefferson is credited with writing, “When injustice becomes law, resistance becomes duty.” The seceding states in the Civil War period issued a similar declaration using the word “tyranny” as opposed to “injustice.”

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