Dealers dont NEED to be exposed to the value of their gold and silver holdings.
Its entirely possible for them to buy and sell their stack, fully hedged.
For example... i could right now, take a short out against my current stacks ASW value.
And the only profit or loss i make ongoing, would be in the premiums i could get...
And just begin trading like that.
Just have to make sure i cover the spread bid-ask in the premiums i get.
I could, in theory, aquire stacks on here at low premium at $170spot
And sell back to market today with a premium at $120spot
And be totally profitable.
Its their choise to be exposed, as it is yours.
Their profit as a businees. Has always been the difference between what they buy at and sell at.
So if they expose themseves to millions in potential loss by not hedging, or want to save the spread cost by only doing it 1ce a day.
Thats not really your problem, and it shouldnt be up to you paying a premium to cover their risk, when that "insurace" cost, is a tiny fraction of the premium their charging.
.01 of a contract is 50oz.
So they should be managing inventory to the 50oz threshold and never be expose more or less that 25oz to the up or downside eitherway at any time... optimally.
Any more details and ill have to sell my programming services in metatrader based automated trading as a quant.