How do dealers manage their risk?

Discussion in 'Silver Coins' started by ytrader, Mar 27, 2015.

  1. ytrader

    ytrader Member

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    not sure if I posted in the right section, free feel to move it :)

    I'm curious how coin/bullion dealers manage their risk against price volatility. For example, if they hold certain number of gold/silver bullions in stock, by the time they sold the stock, the spot price could be lower than their cost.
    Another example, if they take a purchase order over the weekend (priced @Friday's spot), let say a major event caused the spot price to plummet on Monday's exchange open, how do the dealers cover themselves for orders sold over the weekend?

    Thanks in advance! :)
     
    ytrader, Mar 27, 2015
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  2. House

    House Well-Known Member Silver Stacker

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    House, Mar 27, 2015
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  3. o-to

    o-to Member

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    Thank you very much House for this video. I've learned something today!

    Was sure dealers were never loosing money though but didn't know their business model.
     
    o-to, Mar 27, 2015
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