There is no manipulation. There is no conspiracy.

Paul said:
The last 5 years have seen 100,000 to 150,000 contracts move back and forth between Commercials and Managed Money many, many times.

When prices are rising, the largest 4 - 8 commercials are shorting, when the price peaks, they sell longs and start to cover shorts, they are covering on the way down, buying some longs near the bottom.

They make money both ways.

And when prices are near peak, JPM stops buying physical, and starts again after smashing the price.

Lots of people made billions shorting the housing bubble, Paulson made several.

I can't think of anybody who has made $100s of Billions or $Trillions at anything other than taxing us.

The richest men in the world are "only worth" $30 - $50 Billion??

How much do you really need, or want???

For the same %age move in the right direction of the underlying asset, shorters generally make more than the longs due to the contango built into futures pricing.

Obviously, however, prices can not move 100% or more in the short direction.
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Paulson "makes" (read: steals) money by suggesting people to do what benefits him.
For ex in 2013 he speeched to investors that they should own gold, to then sell half the tonnes his fund held.
When confronted with this, the answer was "reduced need for hedging". He became a Zero Hedger haha.
 
Pirocco said:
Those "4-8 commercials", act in behalf of clients.
"Managed Money", is just an "inbetween" class, hence their name.
One cannot trade without a counterparty.
One, cannot buy without a seller.
One, cannot sell without a buyer.
So any large net position change on the supply side, IMPLIES an equal but inverted position change on the demand side.
The funny part is, that some talk all the time about shorts and covering shorts and commercials (being the supply side of the market), and not a word about that equally sided demand side (Large Traders - that include the nonreported, and Small Traders).
The remaining question then is who takes the INITIATIVE to take a futures position?
I'd say the demand side. The side that the silver dealer clubs never talk about.
For a simple reason: it's not a baker dictating people from the neighbourhood to buy bread from him. It's the customers that have to decide so and the baker can only try to convince them.
Covering a short on the supply side, thus has a very simple trigger / reason: a long that just quit a long position. And that "quit" can just be an opposing order. For ex if Joe had 1 futures long position and decides to end his exposure to the price, he can ADD a second futures position, being 1 short position. His total net position then becomes zero, his exposure to the price also zero, and despite him holding now 2 futures positions, for the rest of the market it's like he left the market.
Telling parts of stories, being selective, also in picking time frames, typical tricks to mislead.
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Scotia Bank is undoubtedly one of the two largest net short positions, and they have NO client accounts.

JPM is the other.

Do you really think that the clients of the largest 8 just happen to ALL BE SHORT????

Look at the CFTC COT data. A couple of weeks ago, the largest 8 were net short 50% of the entire COMEX short side.

Even as of last Tuesday, Commercials in total are net short silver 71,082 contracts.

However, the big 8 are short 45.4% of 205235 contracts OI or 93,177 contracts.

How can that be???

It means that the other commercials, smaller than the largest 8, are net long some 22,095 contracts.

Kindly note that there is a very small difference between the gross short and net short positions of the big 8, 48.1% versus 45.4% of OI.

And yes, the proprietary trading of a couple of the big 8 shorts would include some longs to sell at peak prices to spook the herd, and to take delivery of physical.

That leaves precious little room for them to have any "clients" that might want long positions.

Please respond.
 
Paul said:
Then why don't you take a few minutes to enlighten us?
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Already done that.
You returned the same responses then - about how trading the Thai exchange makes you a formidable knowledge-bank of information that is unavailable to anyone, even you.
Then followed up with the same "how is your trading doing?" in a condescending attempt to forge your credibility.
I think Pirocco summed it up pretty well.
 
wrcmad said:
Already done that.
You returned the same responses then - about how trading the Thai exchange makes you a formidable knowledge-bank of information that is unavailable to anyone, even you.
Then followed up with the same "how is your trading doing?" in a condescending attempt to forge your credibility.
I think Pirocco summed it up pretty well.
Click to expand...

Sadly, your very limited troll statements simply saying that others do not understand do not provide any substance to dispute, do not provide any enlightenment, and only solidify the perception that you don't know much and are probably sitting on PM losses that have soured your personality.

A far as your comment about the Thai Futures Exchange is concerned, it should be noted that it doesn't matter what exchange one trades on.
What matters is consistently being on the right side of those trades.
PM prices are global, all futures exchanges move in synchronous, so it doesn't matter which one you trade.

Unlike you, I am trying to help others.
 
Oh yeah.
I forgot mention that you would call me a troll because I disagreed with your assumptionso_O

And your trading ROI's are what I would consider quite dismal.
 
Paul said:
Scotia Bank is undoubtedly one of the two largest net short positions, and they have NO client accounts.

JPM is the other.

Do you really think that the clients of the largest 8 just happen to ALL BE SHORT????

Look at the CFTC COT data. A couple of weeks ago, the largest 8 were net short 50% of the entire COMEX short side.

Even as of last Tuesday, Commercials in total are net short silver 71,082 contracts.

However, the big 8 are short 45.4% of 205235 contracts OI or 93,177 contracts.

How can that be???

It means that the other commercials, smaller than the largest 8, are net long some 22,095 contracts.

Kindly note that there is a very small difference between the gross short and net short positions of the big 8, 48.1% versus 45.4% of OI.

And yes, the proprietary trading of a couple of the big 8 shorts would include some longs to sell at peak prices to spook the herd, and to take delivery of physical.

That leaves precious little room for them to have any "clients" that might want long positions.

Please respond.
Click to expand...
Are you aware of the futures market concept ???
http://www.lbma.org.uk/clearing
"
Clearing in the London Bullion Market is provided by the not-for-profit company, London Precious Metal Clearing Limited (LPMCL) – which is owned and operated by the five clearing LBMA members: HSBC, ICBC Standard Bank, JPMorgan, Scotiabank and UBS."

Scotiabank is one of the 5 LBMA clearing members.

"
They also settle third party loco London bullion transfers, conducted on behalf of clients and other members of the London Bullion Market. This system of ‘paper transfers’ avoids the security risks, costs and impracticality of physically moving metal bars."

A futures market is a hedging environment.
A way to lock in a targeted cost / price, as to be able to offer clients a known price.
A futures market, has a supply side, and a demand side.
The supply side, is a dominantly selling side, and thus does not like a dropping price.
So, they hedge THEIR STOCKS against an eventual dropping price by the time of orders execution / delivery (on the cash market!).
That's why they take short positions.
The demand side, is a dominantly buying side, and thus does not like a rising price.
So, they hedge THEIR ORDERS against an eventual rising price by the time of order execution / delivery (again on the cash market)

So, if one wants to "judge" the futures market, one should "look through it", and understand that it is like an inverted mirror image of the cash / real market.

last Tuesday
= at this moment, the most recent, so data is here:

http://www.cftc.gov/dea/futures/other_lf.htm
Disaggregated Commitments of Traders - Futures Only, May 30, 2017

SUPPLY SIDE
Producer/Merchant/Processor/User Long 13438 Short 66900 -> net Short 53462
SwapDealer Long 32371 Short 49982 -> net Short 17611
-> Supply side is 53462+17611 = 71073 net Short

DEMAND SIDE
ManagedMoney Long 70790 Short 28714 -> net Long 42076
OtherReportables Long 25778 Short 6440 -> net Long 19338
SmallTraders Long 23675 Short 14007 -> net Long 9668
-> Demand side is 42076+19338+9668 = 71082 net Long

Should be equal, so a small difference (9), but saw that enough and also corrected afterwards.
Have you seen your "include some longs to spook..."?
40% of the supply side positions are LONG.
And it doesn't even matter, because all that matters is the NET total.
Someone that has 9 million long positions.
And 9 million short positions.
So 18 million futures positions
Still has a ZERO exposure to the price.
Alike he isn't even present on the market.
Why does an entity with a net 300 long consisting of 600 longs and 300 shorts decide to have those 300 unneeded extra longs?
Well, because it's easier / faster / handier to "throttle" hedging.
No need to take new positions, just dump some existing, in order to reach a desired net / exposure.

And do you know what "clearing" is?
It's the role of a guaranteed counterparty.
One that jumps in when a buyer cannot find a seller or vice versa. Usually because some party failed to do what he's obliged to. Someone paid somebody for something, but that something isn't delivered by that somebody The so called clearinghouse picks up that missed role, and thus also the involved risk (settlement risk).
And it hedges itself, ie that involved risk is offset by the taking for futures market counterpositions.
A clearinghouse thus has a stock (ie bullion bank) to fullfil this job of guaranteed counterparty. A hedged one.
And this isn't a luxury, because if settlement fails, the entire futures market price mechanism would fail, the prices of forward contracts and the spot price would not convergence at expiration, there would be dollars missing and entities that assumed that they were hedged, would find themselves (partly) unhedged.
And thus, the entire goal of the futures market, its existence reason, would be void.
Without a clearinghouse, the certainty of a cost / price would not be there anymore. Entities would be unable to give their customers a price / cost and financial planning would become harder, even impossible, in a case of speculators driving the price to the... wrong direction.
 
Paul said:
What matters is consistently being on the right side of those trades.
PM prices are global, all futures exchanges move in synchronous, so it doesn't matter which one you trade.

Unlike you, I am trying to help others.
Click to expand...
Does that surprise you?
It shoudn't.
The supply siders sit very close to the sources of the underlying / commodities.
They have access to way more data, and much faster - firsthand.
If some mining company loses its equipment into an ocean, the demand side usually has to read it in a newspaper.
The supply siders, not.
Not fair.
Correct.
The entire futures market is an unfair story. The banking system, messing around with prices / rates, producing new money, destroying existing, is unfair. Governments, forcing people to pay whatever for whatever, are unfair.
But it's like it is, take it into account when trading, or don't trade at all. If you aren't aware of risk, unable to cope with, then doing nothing may end up as having been the best choice.
 
I think there is a lot of misunderstanding about futures because people often can only think in terms of trading price and are unaware that some entities just profit from carrying or decarry trades or trading the basis itself.

Regarding the idea that bullion banks or others have naked short positions which they maintain over time to supress the price, if this was true then as contracts came up to expiry they would have to buy the near contract (ie to net that long against their short) and sell the next contract to maintain their short position going forward. If they didn't do this they would then get caught having to deliver on the near contract, and the supression theory is they don't have the metal to deliver. The buying of the near contract would push up its price, moving that contract futher into contango, or higher basis.

If you look at the behaviour of futures contracts approaching expiry, you don't see a rising basis, but a falling one. See this article for more explanation and example of contract basis behaviour https://monetary-metals.com/barclays-caught-red-handed-manipulating-gold/ or https://monetary-metals.com/debunking-gold-manipulation/

I will have a look at updating this analysis with graphs of recent futures contract behaviour.
 
It doesn't even matter whether or not bullion banks take "naked" positions.
Because the futures market is not used to acquire/buy the underlying / commodity.
Nearly all "deliveries" occur in cash (dollars), not in ounces silver or so.
It wasn't even the intention when taking position(s). The intention was to hedge, being receiving dollars in case the price changes - is driven against your real/cash market position. At the same time, if the price would be driven in the direction that your real/cash market position benefits, you lose dollars from your futures positions account. In other words: eventual windfall gains are ALSO lost.
Seen from this perspective, the entire futures market comes down to a "naked" trading place / position. The commodity or whatever the underlying is, mostly isn't needed.
Just imagine someone ordering 10000 ounces silver to deliver over 2 months would hedge the order with 2 long positions, so that in case the price would have risen by then, he would have accumulated the extra cost on his futures account. If he would actually let de futures positions expire and deliver in the commodity, he would end up with / have to pay 20000 ounces. 10000 extra / unwanted ounces and the involved additional cost. A futures position costs a fraction of an order for actual delivery. All that is needed is a margin, high enough for the exchange to be sure of the liquidity needed to keep the futures market in operation.
 
Pirocco said:
Seen from this perspective, the entire futures market comes down to a "naked" trading place / position. The commodity or whatever the underlying is, mostly isn't needed.
Click to expand...
Disagree.
Underlying is crucial as it locks together price of both contract and physical via potential arbitrage.
Without the underlying, it would merely be the likes of crypto-market.
 
wrcmad said:
Disagree.
Underlying is crucial as it locks together price of both contract and physical via potential arbitrage.
Without the underlying, it would merely be the likes of crypto-market.
Click to expand...
You interpreted
"Seen from this perspective, the entire futures market comes down to a "naked" trading place / position. The commodity or whatever the underlying is, mostly isn't needed."
as "market of the underlying".
The underlying itself, isn't needed for the derivative named "future position/contract".
The market for the underlying, is ofcourse needed.
Otherwise there would be no place to steal from and no excuse for the presence of the futures "traders" haha.

And your "potential arbitrage", well, it's as "potential" as a freebie to grab.
Arbitrage occurs because it's money for nothing and enough people out there grab it. :)
And that's its very purpose, it's arbitrage that brings the spot price and the price of forward/future contracts together. Without this, hedging (against speculators + ability to inflict consumers a higher price), the fundamental reason(s) "behind" futures, would fail.
 
A bit of homework on how the markets actually work, a lot of self-accountability for your own investment decisions - resulting in a very diminished need to feed your martyr complex using the prolific permabull rhetoric .... that should do it.
Once these are achieved, you will probably be asking yourself why you ever posed this question. ;)
 
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