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Thread: Interesting Post from the JPM Board on Silver Contracts

  1. #1
    Join Date
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    Default Interesting Post from the JPM Board on Silver Contracts

    http://messages.finance.yahoo.com/St...2&frt=2#381868

    I copyed this from the Yahoo message board.---------------------------------------

    >New Year Strategy from Blythe's Former Traders

    Blythe,

    This is what I am hearing from your former traders (who made "very interesting career decisions"). Well it seem that they are on to a new scheme to corner the Comex and drive the price of silver up $10 to $15 dollars in a matter of weeks.

    The strategy is as follows. We know that Comex only has 105 million ounces of silver of which only 50 million ounces are availabe for delivery. (I personally don't believe the Comex numbers are anywhere near that high, but that is neither here nor there for now.) Well, all it would take is 10,000 contracts on the Comex to buy up all the "available silver" at the Comex and 20,000 contracts to deplete it completely. The current front month March OI is north of 78,000.

    Watch the OI closely. Blythe's former traders are advising major hedgefunds and billioniare investors to buy up as many contracts as possible as March 1 approaches and deposit the cash needed to stand for delivery for the month of March. The purpose is not necessarily to bust the Comex but to force the Comex to pay a premium (some as much as 30 percent) for cash settlement. Think about it. If a group of hedgefund gets together and bankroll $1 billion, they can buy more than 30 million ounces of silver. Of course, the contract sellers like The Morgue cant deliver the silver so a cash settlement is the only recourse. So what's wrong with $200 million in profit on a $1 billion investment that takes less than 4 weeks total?

    Guess what Blythe? Your former traders are advising everyone they know to put on this trade come the first week of February. Is this what happened in the Decemeber contracts? Is this why silver went from $22 on September 30 to $29 by December 1? How much do you think silver will spike in February as we approach March 1? The traders think silver will be north of $45. Heck it went over $9 as we approached December and everyone who got a pay off in terms of a premium cash settlement will be back for more. And they are all gonna be bringing friends to partake in the bounty.

    Your former traders are telling everyone who would listen that all they need to do is purchase a huge amount of March contracts near the end of February and stand for delivery and they will all make 20 percent in a matter of days. Is this what you are hearing Blythe? If so, shouldnt you let the price of silver move up so that you can get some physical to deliver before March 1?

  2. #2

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    Quote Originally Posted by polcat View Post
    http://messages.finance.yahoo.com/St...2&frt=2#381868

    I copyed this from the Yahoo message board.---------------------------------------

    >New Year Strategy from Blythe's Former Traders

    Blythe,

    This is what I am hearing from your former traders (who made "very interesting career decisions"). Well it seem that they are on to a new scheme to corner the Comex and drive the price of silver up $10 to $15 dollars in a matter of weeks.

    The strategy is as follows. We know that Comex only has 105 million ounces of silver of which only 50 million ounces are availabe for delivery. (I personally don't believe the Comex numbers are anywhere near that high, but that is neither here nor there for now.) Well, all it would take is 10,000 contracts on the Comex to buy up all the "available silver" at the Comex and 20,000 contracts to deplete it completely. The current front month March OI is north of 78,000.

    Watch the OI closely. Blythe's former traders are advising major hedgefunds and billioniare investors to buy up as many contracts as possible as March 1 approaches and deposit the cash needed to stand for delivery for the month of March. The purpose is not necessarily to bust the Comex but to force the Comex to pay a premium (some as much as 30 percent) for cash settlement. Think about it. If a group of hedgefund gets together and bankroll $1 billion, they can buy more than 30 million ounces of silver. Of course, the contract sellers like The Morgue cant deliver the silver so a cash settlement is the only recourse. So what's wrong with $200 million in profit on a $1 billion investment that takes less than 4 weeks total?

    Guess what Blythe? Your former traders are advising everyone they know to put on this trade come the first week of February. Is this what happened in the Decemeber contracts? Is this why silver went from $22 on September 30 to $29 by December 1? How much do you think silver will spike in February as we approach March 1? The traders think silver will be north of $45. Heck it went over $9 as we approached December and everyone who got a pay off in terms of a premium cash settlement will be back for more. And they are all gonna be bringing friends to partake in the bounty.

    Your former traders are telling everyone who would listen that all they need to do is purchase a huge amount of March contracts near the end of February and stand for delivery and they will all make 20 percent in a matter of days. Is this what you are hearing Blythe? If so, shouldnt you let the price of silver move up so that you can get some physical to deliver before March 1?
    My inside source, who is just getting involved with a congressional thing on budget and finance (don't worry he is a good guy, worked for Ron Paul for many years and they are personal friends) informed me that silver will be around $40 in March and gold will be around $1600.

    I am inclined to believe that there are going to be some DAZZLING FIREWORKS SOON

  3. #3

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    interesting

    usually most investors going long are leveraged and just don't have the funds to take delivery

    with a new set of investors with 'unlimited' capital - this seems to be a major run up with the intent for cash profits at the end

    the comex will default and most of those taking delivery will gladly take the ever declining FRN and it's 'relative' profits

    call their bluff - the word will be out - the prices will soar more

    sounds like the next month could be a wild ride

    stack while you can

    thanks for sharing
    Last edited by audiotom; 01-06-2011 at 02:12 AM.
    Psalm 119:72 The law of Your mouth is better to me than thousands of gold and silver pieces.

  4. #4

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    yahoo message board is that as reliable as wiki leaks?

  5. #5
    Join Date
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    Default

    Quote Originally Posted by polcat View Post
    This is what I am hearing from your former traders ... We know that Comex only has 105 million ounces of silver of which only 50 million ounces are availabe for delivery.
    We don't need to read any further. Someone with the resources to buy $1.5B of silver knows that COMEX isn't a game where they have 50Moz to deliver. The shorts are required to come up with the silver. If they are able to access the 50Moz, they can; otherwise, they have to come up with it themselves. And some shorts on COMEX have the silver in a vault somewhere, and many have a plan as to how they would get the silver if needed.

    Quote Originally Posted by polcat View Post
    Well, all it would take is 10,000 contracts on the Comex to buy up all the "available silver" at the Comex and 20,000 contracts to deplete it completely. The current front month March OI is north of 78,000.
    And he makes it sound like the 50Moz that customers hold can magically be used to settle contracts. That can only happen if you can magically convince the owners to sell during the month of delivery.

    Quote Originally Posted by polcat View Post
    Watch the OI closely. Blythe's former traders are advising major hedgefunds and billioniare investors to buy up as many contracts as possible as March 1 approaches and deposit the cash needed to stand for delivery for the month of March. The purpose is not necessarily to bust the Comex but to force the Comex to pay a premium (some as much as 30 percent) for cash settlement.
    This is cute, but clearly made up by someone who reads these forums a lot. Yes, there are rumors that COMEX pays premiums for cash settlement. But even if they do, there is no requirement for them to do so. If the shorts fail to deliver, their broker is responsible; if they fail to deliver, COMEX can settle in cash. In cash, not cash plus a premium.

    The longs could then sue whoever they wanted to, but if they got the cash, it's unlikely they would win a lawsuit (unless they could not actually buy silver with that cash).

  6. #6

    Default Comex

    "If the shorts fail to deliver, their broker is responsible;"

    Legally it is the COMEX (CME Group) who has the responsibility to deliver. When a COMEX futures contract to buy or sell is executed it is between the COMEX and the buyer or seller and not whoever took the other side of the trade. This is why the COMEX controls margins and maintains a warehouse.

  7. #7
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    Quote Originally Posted by Venturer View Post
    "If the shorts fail to deliver, their broker is responsible;"

    Legally it is the COMEX (CME Group) who has the responsibility to deliver. When a COMEX futures contract to buy or sell is executed it is between the COMEX and the buyer or seller and not whoever took the other side of the trade. This is why the COMEX controls margins and maintains a warehouse.
    Yes, but it is the responsibility of the short to deliver the metal. That's how the whole futures system works. COMEX acts as a clearinghouse, making sure that when people stand for delivery, they get their metal (or grains or whatever). COMEX is the "deliverer of last resort." When a long stands for delivery, COMEX tells the broker who tells the short. The short is then legally obligated to deliver the silver. And if they cannot, the broker is required to.

    The important point is that the person posting at yahoo makes it sound like if COMEX has 50Moz registered silver in their warehouse, and longs stand for delivery for 50.1Moz, it will bust COMEX. But that just ain't true. Not only is it quite possible that after delivering the 50.1Moz COMEX will still have 50.1Moz (if the short delivers, as promised), but even if the short and the broker default, COMEX could then buy the .1Moz on the open market.

    Yes, if >50Moz stood for delivery, it would be very bullish for silver. But saying that >50Moz standing for delivery would bust COMEX isn't necessarily true.

  8. #8

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    Quote Originally Posted by About AG View Post
    When a long stands for delivery, COMEX tells the broker who tells the short. The short is then legally obligated to deliver the silver. And if they cannot, the broker is required to.
    This would probably be the reason for the rising margin requirements in the metal as well, no? I know enough to be dangerous, but not enough to claim significant knowledge.

  9. #9

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    Where can I learn about the operation of the COMEX, open interest, etc? Hopefully something without an agenda and just descriptive.

  10. #10
    Join Date
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    Quote Originally Posted by hexmap View Post
    Where can I learn about the operation of the COMEX, open interest, etc? Hopefully something without an agenda and just descriptive.
    You might want to check out our page at http://about.ag/futures.htm.

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