Sources: Current: http://www.cftc.gov/dea/futures/other_lf.htm Older: http://www.kitco.com/charts/historicalsilver.html Graphical (green=red+blue=net total): http://finviz.com/futures_charts.ashx?t=SI&p=w1 It's also a low, not a record that was last year, on the decade+ term. Less than 10000 or 10000 x 5000 = 50 Moz price exposure. Date 03/06/2014 position 9640 end of day price (reflecting this position) $18.780 2008's mid crisis bottom was 20000. A peak level on the decade term is 75000, being 375 Moz, being 37% of an annual world total net traded, being abit over the 330 Moz hoard of SLV, the IShares Silver Trust Zombies. A position of zero means that nobody hedges against price movements anymore, that the 'traders' there thus see no price risk. They can be wrong of course. And they can also hedge against silver price movements along other products/prices that tend to move in opposite to silvers. Nevertheless, those on the futures market are generally seen as the better informed, and you clearly see a correlation between their position and the price. But it's not a rule, and they have been wrong (or used other hedging ways, or could live with/compensate for the losses). Based on this and other elements, I'm not suspending my purchases.
Am I the only one who didn't understand anything of what you wrote? Maybe I am getting old (though I look the same I did 20 years ago), or it's getting late (11 this side of the world), but this looks like Latin (or then Chinese) to me. What I am supposed to understand from your message? Speculators expect the price to drop?
Basically, if I read what he said right Prices will be flat hedges are not expecting price hikes or drops in the near future
First read http://www.cftc.gov/MarketReports/CommitmentsofTraders/DisaggregatedExplanatoryNotes/index.htm Specifically the "Content of the Disaggregated Commitments of Traders Report" section. Now you know that "Producer/Merchant/Processor/User" and "Swap Dealer" are entities that use the market to hedge. Then total the numbers from http://www.cftc.gov/dea/futures/other_lf.htm for those entities: 16409+42374-31683-36740 = -9640 Now try with the "Options and Futures Combined" version of the COT at http://www.cftc.gov/dea/options/other_lof.htm 21498+44320-39916-32652 = -6750 I only see the silver price there, no COT. COT archive here: http://www.cftc.gov/MarketReports/CommitmentsofTraders/HistoricalViewable/index.htm
Yes, have both links under eachother in a text file (as to easily find the price of the COT reports activity date) and copypasted the wrong one here. A zero net total position means that they see zero hedging need, meaning that the current silver stock owners and future (hence the name futures market) silver buyers don't see much risk in the current price. This is Latin nor Chinese, but simply the standard terminology used in this matter. So I think Cheepo is jesting. I also think it happened before too.
And I explained this calculation and other stuff a dozen times on this forum, including the link in my signature http://forums.silverstackers.com/topic-51120-silver-info.html It's there, for those that want, and those that don't want, mister Cheepo, can just scroll through!
I wondered many times: why the focus on 'net short position'? Every short requires a long. A contract cannot exist without one willing to take a long, AND one willing to take a short. A buyer, requires a seller. An addition to a long positions account, requires a removal from a short positions account, and vice versa. In order to gain dollars on your account, another one has to lose dollars on his account. So why then 'net short position', instead of 'net position'? All those 9640 short positions on 03/06/2014 have a long position against them. So, there were 9640 long positions too then. But it's like nobody wants to talk about those. Alike they are in some parallel dimension! or so
Doesn't 'net short position' just mean that the net position has more shorts than longs? If you are talking about the graph, it is just the difference short contracts - long contracts of "Producer/Merchant/Processor/User" and "Swap Dealer" from the "Options and Futures Combined" COT reports. The data does not appear to be very useful. Producers and Users are bunched together into one category. Maybe if you knew something simple, like how much people who actually use silver would pay for it...
No, that is per trader (class), not for the futures market as a whole, and that is the figure that is talked about, and that is also the figure that matters for the price influence. I can take a million longs and a million shorts, my net position will be zero, and the price won't change a cent due to it. To make my criticism towards that focus on net short position clear along figures Date 03/06/2014 Total net position (like I name it!): 9640 Days closing price: $18.780 >>> Supply side of the futures market: ("Commercial Hedgers" on finviz.com) Trader Class named "Producer / Merchant / Processor / User" Long 16409 Short 36740 Total net position of this Trader class: 16409-36740=-20331 so NET SHORT Trader Class named "Swap Dealer" Long 42374 Short 31683 Total net position of this Trader class: 42374-31683=+10691 so NET LONG Total net position of the Supply side of the futures market: 16409-36740+42374-31683=-9640 so NET SHORT <- EVERYBODY TALKS ABOUT THIS. >>> Demand side of the futures market: Trader Class named "Managed Money" ("Large Traders" on finviz.com) Long 35166 Short 42804 Total net position of this Trader class: 35166-42804=-7638 so NET SHORT Trader Class named "Other Reportables" (also "Large Traders" on finviz.com) Long 14612 Short 6208 Total net position of this Trader class: 14612-8404=+6208 so NET LONG Trader Class named "Small Traders" (same name on finviz.com) Long 25023 Short 16149 Total net position of this Trader class: 25023-16149=+8874 so NET LONG Total net position of the Demand side of the futures market: 35166-42804+14612-6208+25023-16149=+9640 so NET LONG <- NOBODY TALKS ABOUT THIS. As the figures prove what should be obvious: every short position of that total net position, has a long position. A Net Short position of X implies a Net Long position of X. That's why the -9640 on the supply side, and the +9640 on the demand side. And that is the figure that is talked about here, and that finviz.com publishes under every chart. So that "Short", in "Net Short", is a completely useless focus. It's useful PER trader (class), but NOT on all together, the whole, that influences the price. And that was why I asked why people use 'net short' instead of just 'net total', like I do.
Just to stress: those net 9640 position short on the supply side find 9640 positions long on the demand side. So those Large and Small Traders are willing counterparties. Nobody forced them to take that position. It's even the opposite: much like a shop that can't force customers, it's customers that are the initiating side. They show up to buy, and the shop delivers. The same applies to the futures market: people show up to take a long position, and the shop (the suppliers) is willing to take the corresponding short position. The opposite also happens per Trader (class), and it's even possible that the Demand side is dominantly taking short positions (so they're net short), and in that case, the Supply side will be the net long one. For silver, this does not happen though. At least as far as I know (the data I have). But for other markets this does happen, ex Copper: http://finviz.com/futures_charts.ashx?t=HG&p=w1 Notice how the green trend line (supply side, commercial hedgers) fluctuates both above and under the zero/neutral line. And their counterparties of course, implicitly, too.
Hello world, http://www.cftc.gov/dea/futures/other_lf.htm http://www.kitco.com/LFgif/ag2017D.gif 18/07/2017 21914 $16.17 Producer/Merchant/Processor/User Long 16100 Short 49048 SwapDealer Long 44401 Short 33367 ManagedMoney Long 58827 Short 65913 OtherReportables Long 31949 Short 15487 SmallTraders Long 27528 Short 14990 The previous similar low forward/futures component in the spot price was: 15/12/2015 23542 $13.74 Producer/Merchant/Processor/User Long 19056 Short 37647 Net: -18591 SwapDealer Long 28907 Short 33858 Net: -4951 ManagedMoney Long 50580 Short 47982 Net: 2598 OtherReportables Long 20899 Short 7920 Net: 12979 SmallTraders Long 23873 Short 15908 Net: 7965 So, that was (is?) a better moment to add silver to the stack. Especially if your currencies value is high relative to others. That latter is not my case, despites euro's 2017 increase it still barely reached a 15 years reoccurring floor. ETF's shareholders still hold. They are a big potential price hammer (sized 350 Moz). Comex stock moved substantially higher. Now 213 Moz. 2012-2016 was a 140-180 Moz fluctuation. Not that I had a silver buy in mind, didn't much follow the COT in 2017, this is my first data snap this year. The last time I bought ouncers, they costed me 15 euro each. They still cost 16. I think a major crisis will be orchestrated later this year. I thought that last year too. Eventually, I will be right.
Hedgers act as such to fight speculators (like us stackers). Just like anyone, they try to avoid being inflicted a higher than planned purchase price, or a lower than planned sale price. In order to achieve this, when they place an order (buy or sell) on the real/cash market they take futures positions (long or short), being fake orders, purely to drive up the price ahead of speculators (like us stackers). The stackers that place an immediate (no futures) order during the existence of their futures hedge, thus pay more. That extra is what they receive on their futures account, and it compensates for inbetween (order placement, order delivery) price changes. So those hedgers locked in their order price, regardless what we do in meantime. So it's not advisable to add to stack when the total net futures position sits high.
