Just released a few minutes ago... JP Morgan to reduce their silver short position on the comex. http://www.ft.com/cms/s/0/7d699ca4-06ea-11e0-8c29-00144feabdc0.html The firm said they would make their position "materially smaller".
That can only happen if they buy back and cover for the shorts or settle the contracts and reduce their net short positions. The price should go up as a result of this. Slam
There is always a way around it... Just go to: http://www.google.com Click on the news tab at the top. Type in 'JPMorgan cuts back on US silver futures' Click the top link
OK I have been here for nearly a year and honestly I still do not understand shorts (Not the Girls ones I get them ) Can someone explain it to me in a way that I can explain it to someone else ?
Selling short means selling something you dont have. Real life example, I know my neighbour has a 1950s Mercedes gullwing for sale and wants $100 for it. I then find someone who is looking for that same car, so even though I dont own the car I agree to sell it to him for $150. I take his money. I go to my neighbour, buy his car for $100 and deliver the car to the guy who paid me $150. I have made $50 profit even though I didnt own the car to begin with. That's a naked short. The problem with a naked short is that say I went home and found the neighbours car was gone or not for sale. Now I'm short the car and have to find one to meet my obligations. I go into the market to find a car that cn be dlivered only to find the price is $200! I cant find the car any cheaper so I buy it for $200 and deliver it to the guy who I got the $150 off. Now I've made a loss of $50. If I actually had a gullwing of my own, I'd have not a naked short but a covered short. I might have bought it originally for $75. So if I couldn't find a similar car for under $150 to deliver I could deliver my own car and in that case I'd make a $75 profit, but if the market price was $200; then I've lost a potential extra $50 profit. Someonr who sells something short is relying on the fact they can buy the thing later cheaper so they can make a profit. A price rise leads to losses. I hope that begins to clear things up for you. There are more elements but that is the basics.
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