Who determines the price of a comex contract?

G

grinners

Active Member
Silver Stacker
If reserves are running low, why don't they just increase the price of silver? They have had more than enough opportunities by this point to get out of any potential shorts, and if they really were rigging it, and knew they were gonna raise the price of a contract, they could make a lot of money by going long.


If it is comex that delivers the physical, then does that mean they are the sellers? Rather than individuals (short vs long)? If it is not comex that determines the paper price, then why do they have to deliver the silver? Why doesn't the silver come from the individual who shorted it?
 
grinners said:
If reserves are running low, why don't they just increase the price of silver? They have had more than enough opportunities by this point to get out of any potential shorts, and if they really were rigging it, and knew they were gonna raise the price of a contract, they could make a lot of money by going long.


If it is comex that delivers the physical, then does that mean they are the sellers? Rather than individuals (short vs long)? If it is not comex that determines the paper price, then why do they have to deliver the silver? Why doesn't the silver come from the individual who shorted it?
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Most business principle based on buy low sell high. The demand might not necessarily be met even there's supply to drive the price higher. That for me just part of the manipulation. Recent studies indicate there's 8-10 years before Silver is running low. In short term, it probably is volatile like many other market stocks, however, is bullish over long term. I think people will feel more comfortable putting their hard earned money to something secure (comfort zone) rather have to predicting up and down of market each turn. Yes, it does create opportunities to get the most out of potential shorts, but other factors such as global debt, crude oil..should also taken into consideration..probably is correlation among each factor.

I think Comex itself is just another type of business / Service ?

Just my 2 cents..still learning =)

Have a great day and take care!
 
The COMEX is just an exchange for buyers and sellers. It holds the goods of the sellers for the buyers. Ultimately it is the market that determines pricing - which unfortunately seems a little rigged.

What COMEX have done is not the raise the price of silver but raise the price of holding silver contracts and did it particularly ruthlessly last month. Since some of the trading is speculation, it has prevented some of the smaller time traders in putting in contracts.

With shorting, you are borrowing a contract (from perhaps the big banks) and selling it with the expectation you will be able to buy it at a lower price later. This borrowing is from a pool of "inventory" that the bank owns or perhaps even leases. The speculation is that the big bullion banks have massive shorts on the whole market so if there is a rise in price, it could wreak havoc for them.


Now the question is for COMEX... do they have enough reserves to fulfill all deliveries?

Perhaps... or have a read of this article!

http://www.zerohedge.com/article/sc...-month-reclassification-total-comex-registere
 
Those who hold short contracts untill maturity have to deliver silver, while those who hold longs till maturity take delivery of the silver.

Futures trading is a zero-sum game: there are only as many shorts as there are longs. Likewise, there would be as many short holders to maturity, as there are long holders. The COMEX is merely a go-between and a clearing house, ensuring the quality of the silver delivered, and covering against any participant going bus.
 
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