Hi, you might be familiar with " Bai" from China. He's a metals guy followed by many in the community. About six months ago, he said that " agents" on behalf of a humongous Chinese company, Chengtagh ( spelling) has been shorting the Conex for the purpose of buying physical as cheaply as possible. That company accumulates for both the government and private investors. They could very well be doing what you suggested at this point if they felt it more efficient. Hell, maybe they're doing a hodgepodge of things to gather as much metal as possible.
1. What happens to the Longs when this manipulation stops? If the spot price of silver is suddenly 3X higher than the contract price, will that silver still be delivered?
2. You can't just sell any silver through the COMEX. It has to come from a listed refinery, and gotten into the COMEX vaults in NYC in time. This could pose a challenge in getting the right silver to the COMEX on a just-in-time basis.
Interesting theories and not wholly without merit . A lot of what you describe can be put down to manipulation of the settlement price . If you look at how this are achieved on the LME for instance , you will see that the Daily Cash settlement price is rarely where the price was a few minutes prior . It is forced down in the last seconds not giving any potential buyers a chance to do so . If you consider that the silver price is at a level where many producers are happy and have to hedge , this would be done on a monthly “swap “ with the price being based on the average of the daily comex settlement or the silver fix . The London Fix is now heavily regulated and not so manipulated as it could have been in the past , but comex settlement definitely has potential for it . Thus the HSBC “ customer “ is the seller over the average and the bank itself has already sold it in advance and pushes the price down at the close of businesses . Something for you to consider
You need to study TAS (Trade At Settlement) pricing. These are contracts that may be traded anytime during the day, but their value is determined by the closing price. And it is often done.
Hi, you might be familiar with " Bai" from China. He's a metals guy followed by many in the community. About six months ago, he said that " agents" on behalf of a humongous Chinese company, Chengtagh ( spelling) has been shorting the Conex for the purpose of buying physical as cheaply as possible. That company accumulates for both the government and private investors. They could very well be doing what you suggested at this point if they felt it more efficient. Hell, maybe they're doing a hodgepodge of things to gather as much metal as possible.
Thank you, I lost the link and could not remember the name till now.
https://twitter.com/oriental_ghost?lang=en
Imminent being a week, a month,a quarter?
I read it as next 1st day notice
A couple wrinkles come to mind...
1. What happens to the Longs when this manipulation stops? If the spot price of silver is suddenly 3X higher than the contract price, will that silver still be delivered?
2. You can't just sell any silver through the COMEX. It has to come from a listed refinery, and gotten into the COMEX vaults in NYC in time. This could pose a challenge in getting the right silver to the COMEX on a just-in-time basis.
Interesting theories and not wholly without merit . A lot of what you describe can be put down to manipulation of the settlement price . If you look at how this are achieved on the LME for instance , you will see that the Daily Cash settlement price is rarely where the price was a few minutes prior . It is forced down in the last seconds not giving any potential buyers a chance to do so . If you consider that the silver price is at a level where many producers are happy and have to hedge , this would be done on a monthly “swap “ with the price being based on the average of the daily comex settlement or the silver fix . The London Fix is now heavily regulated and not so manipulated as it could have been in the past , but comex settlement definitely has potential for it . Thus the HSBC “ customer “ is the seller over the average and the bank itself has already sold it in advance and pushes the price down at the close of businesses . Something for you to consider
You need to study TAS (Trade At Settlement) pricing. These are contracts that may be traded anytime during the day, but their value is determined by the closing price. And it is often done.