I hedged my holdings by buying the SLV put. 1 contracts is about equivalent to 95 ounces of PM. I insured for 10 months for 82 dollars. 14 strike. So if silver plummets to 8 dollars I can sell to close and the cash difference would lower the cost basis I bought 110 ounces of silver and figured hedging risk is a good idea especially with the looming rate hike although its pretty priced into the spot already and thats why Silver trades where it has been lately.
Please hang in there with me on this one. I have learned a lot on this site from various views from the members with thousands of posts. It took me a while to get up the balls to post my first one, then my second because I felt like others thought my opinions may not be valid or I was a troll or had alterative motives. So I keep learning from you guys and just read instead of signing in. There was a post a bit ago when someone else was called out for only having a few posts and not being invested in the site and he said basically the same thing and a few stuck up for him. !> if you guys want to except the fact that you are teachers and do make a difference to a few of us, them take homage in that and know we are here and listening to all the reasons we stack (please see my past posts). I did have to chime in here because I think that this particular thread content is BS and this individual should probably spend more time learning from all your wisdom then posting. I am sorry and understand it is he/she viewpoint but IMHU is missing the point of STACKING. If he she wants advice on turning a profit (which is fine but do it in physical), hedging with Paper and taking away from the real world then so be it. But that would be Slime Stackers, money for nothing forum. We all have reason for stacking but please do not ask for advice on Paper on this forum. Please tell me where I am wrong as I said I am just a pup at this but felt I had to respond.
I apologize for any rant and my mixed thoughts all over the place but it just kind of irritated me when I read.
To me hedging your physical with paper is the best way to do it. I'm sure elsapo stacks phys for the same reasons as everyone here but would (a)rather not continue losing money on a non-income producing "asset", (b)mitigate his risk and exposure to a market at the mercy of paper traders, (c)adopt the old adage of "if you can't beat them, join them" and (d)actually make some money in metals. There's a few here that trade paper but buy physical with the profits. Smart. Very smart.
OMFG. WTF? Are you neighbours with Pirocco? I think you need to spend more time learning, because your "chime in" was the biggest piece of BS I have read in a long time.
I agree with house, leveraging paper with physical is smart but difficult. Hedging minimizes loss and caps gains, but the exposure is a very safe and systematic approach. What elsapo is doing is more complicated than your typical buy and hold. Since the paper market is so unbalanced, he can protect his physical with paper if there is a steep drop or climb. If more people did bought put's over the last few years, they wouldn't have lost as much when they physically bought. It's hedging. Kota, it would probably be wise to learn about the paper markets as well since those are what drive the prices. Learning about when and how PM's move in tandem with the market will be useful for a balanced portfolio.
Please do not be condescending. I am trying to learn. I have only stated an initial opinion and asked for feedback. If you would have taken the time to educate yourself and look into my previous posts you may/or not be so obtuse in your judgment. I would rather listen to house or Pirrocco and get different points of opinion and learn than to hear someone talk down on someone trying to learn from them. Is that how this is going? Is that how you with 5,112 posts want to allow others to feel comfortable to post? Do you know all? Yes more than me prob but you are either a teacher or the opposite. Be productive. Otherwise there will be no one else that wants to post/learn from you and the others.
Sliverpv, Thank you for insight. I would like to learn more and am trying. I appreciate all views (well not the condescending ones), which perhaps I was one with my first response on the thread and I apologize.
Have a read of this thread and see what you think- http://forums.silverstackers.com/message-663462.html#p663462
You're are kidding aren't you? :lol: Or trolling? FFS. If you want to sulk about condescending posts, then I suggest you re-read your post and consider the multiple hypocrisies contained within, my friend. Just to jog your memory, I have reposted below. You asked where you were wrong, so I am pointing it out to you.
I wish I had the resources to hedge and/or the knowledge to do it with what I have. Maybe some day. for now I learn and enjoy the learning if even not the resources to execute.
I hedge with binary put options. I don't do it so much with silver due to the volatility in the silver market, more with the GLD put option and I'll sell the XAU/USD forex trade from time to time or even the AUD/USD or CAD/USD as the Aussie and Canadian are commodity currencies anyway. I win twice with the Aussie when I sell it as any physical holdings I have generally go up in value if I've bought in AUD and the profit from the trade itself. Wait for the Aussie to bounce again and gold to fall and buy physical with the profit. Rinse and repeat until gold and silver enter a bull market. Beats sitting around watching the value of your asset slowly eroding. Of course such trading ruffles feathers among the physical stacking crowd who would rather adhere to conspiracy and manipulation stories than making the current bear market environment work for you rather than against you.
House asked me to read your past post. I apologize. Can you accept that? Without anymore darts? Or are you trying to scare all of us newbies out?
I'm essentially long silver at these prices, since I don't have a fixed date that I need to sell at I feel like taking a hedge position is just betting against myself. When I'm trading forex (what a day there, huh?) I'll often pick a second pair to take a position in the opposite direction of the first, but even there I am hopimg for a profit in both directions. Today it was short aud/usd and a smaller long aud/mxn. If I was turning over stock in a bullion business it would be different but since silver can't go to 0 and almost nobody is saying that silver will never be worth much more than it is now it's really just a matter of time. Like CL I have used CFDs to hedge the currency (and physical greenbacks for a while) when I've wanted to take advantage of lower USD prices, but too often I get greedy and pull the position because it's ip like it should be or I don't give it enough room to run and get stopped out. Unfortunately
I think wrcmad's results from hedging speak for themselves http://forums.silverstackers.com/message-514276.html#p514276
Wow thread this sounds like my Ex Anyway staying on topic, I see silver as my hedge/savings. I don't really like the paper market it's whats wrong with PM's DUE TO MASSIVE MANIPULATION. comex is currently at 128.3 ounces of paper to every ounce of phyzz they hold, why people would buy into that baffles me. Especially when we are looking a price variations of maybe a few bucks a year and a falling Aussie dollar haven't people ever heard of Bitcoin? makes much more sense to have money parked in that than paper silver, and if like trading, even better! the same annual swings in silver can happen in a day in crypto's. which is also what turns some people off I guess.
