Another round of smackdown is ahead for Gold and Silver

wrcmad said:
Caneorange said:
So, CFD's are completely different than stocks and options on stocks. These are going into the futures markets and that is about the extent of my knowledge in the futures market.
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CFD's do not resemble futures one little bit, and they are not options.
They are in fact exactly like stocks - and even pay the dividends - they are like a very leveraged margin loan.

Caneorange said:
Please correct any of the following that is not right based on the above statement (0 experience in futures).
I can see how if you have 0.5% on margin your cash outlay would be lower, but now you are leveraged to a ridiculous amount. If I did $100 at 0.5% margin I have thus $20,000 at risk and if I am wrong even slightly the loss will be huge. The reverse for the gain would be equally true. I try not to do any trade that could wipe me out and this type of thing could wipe me out very quickly. How would you manage that risk?
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Why would you put on a leveraged trade that could wipe you out? That is insanity.
Just because you can access leverage doesn't mean you have to extend yourself as far as you can possibly afford - that is for Gen-Y first-homebuyers in Sydney. :lol:
Why not just outlay $5 for $1000 exposure?
No time premium, no greeks, no brokerage fees, no reduction in potential profit,... and the remainder of your cash parked outside any brokerage house or dealer.
Risk is managed through automatic stop-losses, and you can opt for guaranteed stops if you like.
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Can you give me the underlying of 1 cfd that you can short that will give you the person short the shares the dividend. I would like to investigate this further.
Agreed insanity on the high leverage that is what I said.
 
Caneorange said:
Can you give me the underlying of 1 cfd that you can short that will give you the person short the shares the dividend. I would like to investigate this further.
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:lol: In my wildest dreams!
Same as shares - long receives divvy, short delivers divvy.

However, here is the kicker - leveraged finance is settled daily.
Long pays interest, short receives interest.
Yes, that is correct - when you short sell CFD's, the interest on money owing from the sale is paid to the short seller daily. You get paid to hold a short position, which is miles away from costly time decay of options. :D
Caneorange said:
Agreed insanity on the high leverage that is what I said.
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Only if you use it recklessly. ;)
 
I always watch iGold Advisor's videos on YouTube ... For those who haven't seen any of his analysis videos .. definitely worth a watch.

Here is his latest videos - February 10 - where he discusses both the Gold and Silver Markets and trends.

[youtube]http://www.youtube.com/watch?v=HLN3a46XJlE[/youtube]
 
So a cfd is only a brokerage account to trade in that allows a very low margin requirement and no brokerage fees. I would be careful dealing with one of these companies then because the reason for margin requirements isn't your safety it is for the brokerage houses safety and if they go bankrupt because of someone else's poor trading skills you will lose all of your money as well.

Now I go back to the same statements as earlier regarding a put being better than short selling and since cfd are just leverage and the definition of leverage is just amplification of your gains or losses. A bad trade that loses $100 doesn't become a bad trade because the requirement to put the trade on was $10 versus $1 it is the same trade with the same total risk.
 
willrocks said:
It's impossible to say without knowing 1. The option expiry date, 2. Strike price, 3. The number of options purchased, and 4. The underlying EFT.

Typically with options you risk the entire amount. So if I purchased 4 Mar 2016 SLV PUT options with a strike price of anything <= $14.50, I would be currently down about ~90%. I would need the price to drop significantly below the strike price in order to make any gain.
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if considering the knock and out, with silver fix like that, the lost will be complete in no time. :lol:

market liquidity is very important to trade, while manipulated... there is always too many dark rooms to get stuck in :)
 
Caneorange said:
Yes. Could I short Slv using a cfd?
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I'm guessing you might be a US citizen since you know about options and not CFDs, which case unfortunately you can't as CFDs are illegal for US citizens.
 
aleks said:
Caneorange said:
Yes. Could I short Slv using a cfd?
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I'm guessing you might be a US citizen since you know about options and not CFDs, which case unfortunately you can't as CFDs are illegal for US citizens.
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That explains why I hadn't heard of them and assumed they were in the futures area.
 
My silver short position is deep water now, crap.

Commercial traders tend to have deeper pocket than I have. So I decided to double down my silver short @15.72, and I would like to see how Swap dealers unwind their short position in the following weeks.
 
I think the silver chart looks like a cup and handle forming. If so, once at $16 or so we will drop to form the handle, then up past $16 if we are in fact in a bullish cycle again (short term, long term?). If not bullish then we go back in the $14s and maybe lower.

I have no clue which it will be. Good to see you back Leon.

Jim
 
If he literally doubled down his break even will be around 15.22. So he will probably come out of this looking good.

I at least hope so. Only for selfish reasons though. I am wanting to buy some and wanting to see the drop.
 
Caneorange said:
o a cfd is only a brokerage account to trade in that allows a very low margin requirement and no brokerage fees. I would be careful dealing with one of these companies then because the reason for margin requirements isn't your safety it is for the brokerage houses safety and if they go bankrupt because of someone else's poor trading skills you will lose all of your money as well.
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No.
Profits and losses are marked to market daily, so no chance of a bad trade getting out of hand.

Caneorange said:
Now I go back to the same statements as earlier regarding a put being better than short selling and since cfd are just leverage and the definition of leverage is just amplification of your gains or losses. A bad trade that loses $100 doesn't become a bad trade because the requirement to put the trade on was $10 versus $1 it is the same trade with the same total risk.
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Agree.
That was my point.
 
Caneorange said:
If he literally doubled down his break even will be around 15.22. So he will probably come out of this looking good.

I at least hope so. Only for selfish reasons though. I am wanting to buy some and wanting to see the drop.
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Looks like he could have broke even if he'd been quick at 2:30 am NY Time when it briefly hit 15.20.
 
Swap dealer is equivalent of market-maker in this rigged futures market. How can they lose money? ;)

They're sitting on massive short contracts, and they have to cover them somehow with a profit. I am simply following them. Is it a good time to buy silver? I would wait until swap dealer's short/long ratio reduces to 1:1. So far it is more than 2:1. It's gonna take some time, be patient.
 
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