There is no manipulation. There is no conspiracy.

Discussion in 'Silver' started by Gatito Bandito, Jun 2, 2017.

  1. Pirocco

    Pirocco Well-Known Member

    Joined:
    May 24, 2011
    Messages:
    4,872
    Likes Received:
    149
    Trophy Points:
    63
    Location:
    EUSSR
    Paulson "makes" (read: steals) money by suggesting people to do what benefits him.
    For ex in 2013 he speeched to investors that they should own gold, to then sell half the tonnes his fund held.
    When confronted with this, the answer was "reduced need for hedging". He became a Zero Hedger haha.
     
  2. Paul

    Paul Member

    Joined:
    Apr 16, 2017
    Messages:
    64
    Likes Received:
    11
    Trophy Points:
    8
    Scotia Bank is undoubtedly one of the two largest net short positions, and they have NO client accounts.

    JPM is the other.

    Do you really think that the clients of the largest 8 just happen to ALL BE SHORT????

    Look at the CFTC COT data. A couple of weeks ago, the largest 8 were net short 50% of the entire COMEX short side.

    Even as of last Tuesday, Commercials in total are net short silver 71,082 contracts.

    However, the big 8 are short 45.4% of 205235 contracts OI or 93,177 contracts.

    How can that be???

    It means that the other commercials, smaller than the largest 8, are net long some 22,095 contracts.

    Kindly note that there is a very small difference between the gross short and net short positions of the big 8, 48.1% versus 45.4% of OI.

    And yes, the proprietary trading of a couple of the big 8 shorts would include some longs to sell at peak prices to spook the herd, and to take delivery of physical.

    That leaves precious little room for them to have any "clients" that might want long positions.

    Please respond.
     
  3. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,644
    Likes Received:
    1,502
    Trophy Points:
    113
    Location:
    Northern NSW
    Response:
    Too many assumptions to take you seriously. ;)
     
  4. Paul

    Paul Member

    Joined:
    Apr 16, 2017
    Messages:
    64
    Likes Received:
    11
    Trophy Points:
    8
    Then why don't you take a few minutes to enlighten us?
     
  5. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,644
    Likes Received:
    1,502
    Trophy Points:
    113
    Location:
    Northern NSW
    Already done that.
    You returned the same responses then - about how trading the Thai exchange makes you a formidable knowledge-bank of information that is unavailable to anyone, even you.
    Then followed up with the same "how is your trading doing?" in a condescending attempt to forge your credibility.
    I think Pirocco summed it up pretty well.
     
  6. Paul

    Paul Member

    Joined:
    Apr 16, 2017
    Messages:
    64
    Likes Received:
    11
    Trophy Points:
    8
    Sadly, your very limited troll statements simply saying that others do not understand do not provide any substance to dispute, do not provide any enlightenment, and only solidify the perception that you don't know much and are probably sitting on PM losses that have soured your personality.

    A far as your comment about the Thai Futures Exchange is concerned, it should be noted that it doesn't matter what exchange one trades on.
    What matters is consistently being on the right side of those trades.
    PM prices are global, all futures exchanges move in synchronous, so it doesn't matter which one you trade.

    Unlike you, I am trying to help others.
     
  7. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,644
    Likes Received:
    1,502
    Trophy Points:
    113
    Location:
    Northern NSW
    Oh yeah.
    I forgot mention that you would call me a troll because I disagreed with your assumptionso_O

    And your trading ROI's are what I would consider quite dismal.
     
  8. Pirocco

    Pirocco Well-Known Member

    Joined:
    May 24, 2011
    Messages:
    4,872
    Likes Received:
    149
    Trophy Points:
    63
    Location:
    EUSSR
    Are you aware of the futures market concept ???
    http://www.lbma.org.uk/clearing
    "
    Clearing in the London Bullion Market is provided by the not-for-profit company, London Precious Metal Clearing Limited (LPMCL) – which is owned and operated by the five clearing LBMA members: HSBC, ICBC Standard Bank, JPMorgan, Scotiabank and UBS."

    Scotiabank is one of the 5 LBMA clearing members.

    "
    They also settle third party loco London bullion transfers, conducted on behalf of clients and other members of the London Bullion Market. This system of ‘paper transfers’ avoids the security risks, costs and impracticality of physically moving metal bars."

    A futures market is a hedging environment.
    A way to lock in a targeted cost / price, as to be able to offer clients a known price.
    A futures market, has a supply side, and a demand side.
    The supply side, is a dominantly selling side, and thus does not like a dropping price.
    So, they hedge THEIR STOCKS against an eventual dropping price by the time of orders execution / delivery (on the cash market!).
    That's why they take short positions.
    The demand side, is a dominantly buying side, and thus does not like a rising price.
    So, they hedge THEIR ORDERS against an eventual rising price by the time of order execution / delivery (again on the cash market)

    So, if one wants to "judge" the futures market, one should "look through it", and understand that it is like an inverted mirror image of the cash / real market.

    last Tuesday
    = at this moment, the most recent, so data is here:

    http://www.cftc.gov/dea/futures/other_lf.htm
    Disaggregated Commitments of Traders - Futures Only, May 30, 2017

    SUPPLY SIDE
    Producer/Merchant/Processor/User Long 13438 Short 66900 -> net Short 53462
    SwapDealer Long 32371 Short 49982 -> net Short 17611
    -> Supply side is 53462+17611 = 71073 net Short

    DEMAND SIDE
    ManagedMoney Long 70790 Short 28714 -> net Long 42076
    OtherReportables Long 25778 Short 6440 -> net Long 19338
    SmallTraders Long 23675 Short 14007 -> net Long 9668
    -> Demand side is 42076+19338+9668 = 71082 net Long

    Should be equal, so a small difference (9), but saw that enough and also corrected afterwards.
    Have you seen your "include some longs to spook..."?
    40% of the supply side positions are LONG.
    And it doesn't even matter, because all that matters is the NET total.
    Someone that has 9 million long positions.
    And 9 million short positions.
    So 18 million futures positions
    Still has a ZERO exposure to the price.
    Alike he isn't even present on the market.
    Why does an entity with a net 300 long consisting of 600 longs and 300 shorts decide to have those 300 unneeded extra longs?
    Well, because it's easier / faster / handier to "throttle" hedging.
    No need to take new positions, just dump some existing, in order to reach a desired net / exposure.

    And do you know what "clearing" is?
    It's the role of a guaranteed counterparty.
    One that jumps in when a buyer cannot find a seller or vice versa. Usually because some party failed to do what he's obliged to. Someone paid somebody for something, but that something isn't delivered by that somebody The so called clearinghouse picks up that missed role, and thus also the involved risk (settlement risk).
    And it hedges itself, ie that involved risk is offset by the taking for futures market counterpositions.
    A clearinghouse thus has a stock (ie bullion bank) to fullfil this job of guaranteed counterparty. A hedged one.
    And this isn't a luxury, because if settlement fails, the entire futures market price mechanism would fail, the prices of forward contracts and the spot price would not convergence at expiration, there would be dollars missing and entities that assumed that they were hedged, would find themselves (partly) unhedged.
    And thus, the entire goal of the futures market, its existence reason, would be void.
    Without a clearinghouse, the certainty of a cost / price would not be there anymore. Entities would be unable to give their customers a price / cost and financial planning would become harder, even impossible, in a case of speculators driving the price to the... wrong direction.
     
    wrcmad likes this.
  9. Pirocco

    Pirocco Well-Known Member

    Joined:
    May 24, 2011
    Messages:
    4,872
    Likes Received:
    149
    Trophy Points:
    63
    Location:
    EUSSR
    Does that surprise you?
    It shoudn't.
    The supply siders sit very close to the sources of the underlying / commodities.
    They have access to way more data, and much faster - firsthand.
    If some mining company loses its equipment into an ocean, the demand side usually has to read it in a newspaper.
    The supply siders, not.
    Not fair.
    Correct.
    The entire futures market is an unfair story. The banking system, messing around with prices / rates, producing new money, destroying existing, is unfair. Governments, forcing people to pay whatever for whatever, are unfair.
    But it's like it is, take it into account when trading, or don't trade at all. If you aren't aware of risk, unable to cope with, then doing nothing may end up as having been the best choice.
     
  10. bron.suchecki

    bron.suchecki Well-Known Member

    Joined:
    Feb 12, 2016
    Messages:
    231
    Likes Received:
    340
    Trophy Points:
    63
    Location:
    Perth
    I think there is a lot of misunderstanding about futures because people often can only think in terms of trading price and are unaware that some entities just profit from carrying or decarry trades or trading the basis itself.

    Regarding the idea that bullion banks or others have naked short positions which they maintain over time to supress the price, if this was true then as contracts came up to expiry they would have to buy the near contract (ie to net that long against their short) and sell the next contract to maintain their short position going forward. If they didn't do this they would then get caught having to deliver on the near contract, and the supression theory is they don't have the metal to deliver. The buying of the near contract would push up its price, moving that contract futher into contango, or higher basis.

    If you look at the behaviour of futures contracts approaching expiry, you don't see a rising basis, but a falling one. See this article for more explanation and example of contract basis behaviour https://monetary-metals.com/barclays-caught-red-handed-manipulating-gold/ or https://monetary-metals.com/debunking-gold-manipulation/

    I will have a look at updating this analysis with graphs of recent futures contract behaviour.
     
    silver-ltt and wrcmad like this.
  11. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,644
    Likes Received:
    1,502
    Trophy Points:
    113
    Location:
    Northern NSW
    Always the rational voice.
     
  12. Pirocco

    Pirocco Well-Known Member

    Joined:
    May 24, 2011
    Messages:
    4,872
    Likes Received:
    149
    Trophy Points:
    63
    Location:
    EUSSR
    It doesn't even matter whether or not bullion banks take "naked" positions.
    Because the futures market is not used to acquire/buy the underlying / commodity.
    Nearly all "deliveries" occur in cash (dollars), not in ounces silver or so.
    It wasn't even the intention when taking position(s). The intention was to hedge, being receiving dollars in case the price changes - is driven against your real/cash market position. At the same time, if the price would be driven in the direction that your real/cash market position benefits, you lose dollars from your futures positions account. In other words: eventual windfall gains are ALSO lost.
    Seen from this perspective, the entire futures market comes down to a "naked" trading place / position. The commodity or whatever the underlying is, mostly isn't needed.
    Just imagine someone ordering 10000 ounces silver to deliver over 2 months would hedge the order with 2 long positions, so that in case the price would have risen by then, he would have accumulated the extra cost on his futures account. If he would actually let de futures positions expire and deliver in the commodity, he would end up with / have to pay 20000 ounces. 10000 extra / unwanted ounces and the involved additional cost. A futures position costs a fraction of an order for actual delivery. All that is needed is a margin, high enough for the exchange to be sure of the liquidity needed to keep the futures market in operation.
     
  13. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,644
    Likes Received:
    1,502
    Trophy Points:
    113
    Location:
    Northern NSW
    Disagree.
    Underlying is crucial as it locks together price of both contract and physical via potential arbitrage.
    Without the underlying, it would merely be the likes of crypto-market.
     
    bron.suchecki likes this.
  14. Pirocco

    Pirocco Well-Known Member

    Joined:
    May 24, 2011
    Messages:
    4,872
    Likes Received:
    149
    Trophy Points:
    63
    Location:
    EUSSR
    You interpreted
    "Seen from this perspective, the entire futures market comes down to a "naked" trading place / position. The commodity or whatever the underlying is, mostly isn't needed."
    as "market of the underlying".
    The underlying itself, isn't needed for the derivative named "future position/contract".
    The market for the underlying, is ofcourse needed.
    Otherwise there would be no place to steal from and no excuse for the presence of the futures "traders" haha.

    And your "potential arbitrage", well, it's as "potential" as a freebie to grab.
    Arbitrage occurs because it's money for nothing and enough people out there grab it. :)
    And that's its very purpose, it's arbitrage that brings the spot price and the price of forward/future contracts together. Without this, hedging (against speculators + ability to inflict consumers a higher price), the fundamental reason(s) "behind" futures, would fail.
     
    wrcmad likes this.
  15. MarkovProcess

    MarkovProcess Member

    Joined:
    Mar 7, 2017
    Messages:
    52
    Likes Received:
    8
    Trophy Points:
    8
    Location:
    Melbourne
    Will they theoretically be able to manipulate Gold&Silver Price forever? What can stop them from doing this?
     
  16. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,644
    Likes Received:
    1,502
    Trophy Points:
    113
    Location:
    Northern NSW
    A bit of homework on how the markets actually work, a lot of self-accountability for your own investment decisions - resulting in a very diminished need to feed your martyr complex using the prolific permabull rhetoric .... that should do it.
    Once these are achieved, you will probably be asking yourself why you ever posed this question. ;)
     
  17. Pirocco

    Pirocco Well-Known Member

    Joined:
    May 24, 2011
    Messages:
    4,872
    Likes Received:
    149
    Trophy Points:
    63
    Location:
    EUSSR
    Make them fail manipulating you into buying high / selling low?
     
  18. SilverTounge15

    SilverTounge15 Well-Known Member Silver Stacker

    Joined:
    Mar 27, 2015
    Messages:
    1,326
    Likes Received:
    1,298
    Trophy Points:
    113
    Location:
    Adelaide
    If Israel had the largest deposits of silver then can you imagine the spot price..........
     
    Skyrocket likes this.
  19. Pirocco

    Pirocco Well-Known Member

    Joined:
    May 24, 2011
    Messages:
    4,872
    Likes Received:
    149
    Trophy Points:
    63
    Location:
    EUSSR
     

Share This Page