What caused silver to go all the way up to $50 steadily, then drop to $26/oz, if it happened then wouldnt that mean it could happen again, what was the reason it dropped too?
My understanding was that the comex lifted the margin requirements for CFDs. This was a significant margin hike and squeezed a lot of the smaller scale paper traders out of the market as they were not able / willing to trade / risk the higher amount of $ required to enter a CFD. Mr.G
This, several times over a month ( I think it was raised 3 times in 1 week? ) They had previously raised the requirements periodically every 2-3 months or so for a period of about a year before they stopped in (I think it was) october/november? they stopped raising margins for 5-6 months after that; this, while the price was booming/ramping, and then BaM! Multiple times hitting all the new paper investors that were on margins in a short period. Their Reason: we had to raise requirements to stop a bubble from forming... True, but soooooo obviously set up that way; in hindsight of course. I didn't pick it. Sort of like the obvious monthly smack downs they used to get up to, but on a bigger time frame. No doubt they racked in a boatload of silver and cash doing it. Any traders that remember that more clearly than I feel free to correct me. ------------------------------------ If you don't hold it, you don't own it. ------------------------------------
The second drop, coincided with 1 single large margin increase, around the september triple witching ( google is your friend. ) meaning it was bound to be volitile and cause a heap of problems with traders that were waiting for the price to bounce back 6 months later. Then they made the "Opening contract margin %" the same as ( = ) the "Keep contract open margin %" by lifting the "Keep contract open %" on a bunch of commodities including gold and silver. Basically if you opened a trade then, and put in your account the exact minimum amount they require to open an account, then you will be hit with a margin call if the price drops 'AT ALL' ! This is a poison dagger for those who don't want to catch a falling knife <--- see what i did there ) as they wont want to take out a new contract if the amount they can open it at would mean they would be getting a margin call the next day. plus it sort of exaggerates a falling price, with less of an effect on rising prices ( suppressive rather than supportive I believe. ) the price dipped slowly after that untill it bottom around 26, and reversed. It took STRONG support to stop that, fundamental, and psychological, in my opinion. A drop like that could happen again.. sure, but i would be expecting it to occur after another mania phase, at a substantially higher price. stellaconcepts had some fantastic videos with technicals that shed a lot of light onto these events. But I think you might need to do something with youtube ( join his channel, ect ) to see them. I have been unable to browse old vids. Again if Ive missed something or outright buggered it up, correct me.
For some bizarre reason he decided to move all his videos across to ozstellaconcepts, and leave no mention of it on the old youtube channel.
I've been wondering why the price dropped too. When we purchased our 1st silver we knew the market went up and down yet we still got caught purchasing in the 'mania' stage and have seen the price fall ever since! We are about to purchase more PM's with our SMSF and are once bitten twice shy... Not sure when to purchase and want to konw more about why the price goes up and down and what causes it. I will check out ozstellaconcepts.
If the margins were raised, does that mean that the new rises in POS today factor in the fact that "bigger money" is getting into silver now and that is what is raising the price? Or have they since lowered the margins again... I'm assuming that before margins were raised, all the small paper traders may have bumped the price up significantly and now that they can no longer do that then the increases in price are more stable?
