Showing posts with label silver. Show all posts
Showing posts with label silver. Show all posts
Tuesday, August 2, 2011
Wednesday, November 10, 2010
CME raising margin on Comex silver futures contracts
The new requirements make it more expensive for speculators and investors to hold positions in these hot commodity markets.
After the close of trading on Wednesday, investors seeking to put on an initial position in the silver futures market will be required to post $8,775 per 5,000 ounce silver contract versus the previous $6,500. And investors with existing positions that are losing money will be asked to post $6,500 instead of $5000 for ongoing “maintenance” margins.
While the new margin requirements make it riskier for traders to make highly speculative bets, it could actually end up being bullish for the markets, says Kevin Grady, a trader for MF Global.
That's because traders with "long" positions—who bet prices will rise—aren't affected while "short" traders—who bet prices will fall—will get squeezed out because they have to put up more money to maintain their bets, he says.
Jim Steel, HSBC chief commodity analyst, says history shows that reaction to such margin adjustments are “sharp but short”. The last time margins were increased was after close of business June 7, 2010 when the price of silver was roughly 50% lower than it is today.
Friday, June 19, 2009
This Day in Wall Street History 1934: 'Silver Purchase Act' is passed
President Franklin Roosevelt's first term in office was packed with busy days, and June 19, 1934, was certainly no exception.
Indeed, on this day Congress passed a veritable smorgasbord of legislation, including the "Silver Purchase Act." Along with nationalizing silver stocks, the bill charged the president with increasing the Treasury's silver supply.
Though silver was hardly about to supplant the gold standard, the legislation called for silver to equal one-third of the Treasury's gold holdings. And, while to some to the "Silver Act" was perhaps little more than another blip during Roosevelt's furious first term, the passage of the bill marked a rare victory for the long-suffering silver movement, which had pushed for the adoption of metal since the late 19th century.
Source: History.com
Indeed, on this day Congress passed a veritable smorgasbord of legislation, including the "Silver Purchase Act." Along with nationalizing silver stocks, the bill charged the president with increasing the Treasury's silver supply.
Though silver was hardly about to supplant the gold standard, the legislation called for silver to equal one-third of the Treasury's gold holdings. And, while to some to the "Silver Act" was perhaps little more than another blip during Roosevelt's furious first term, the passage of the bill marked a rare victory for the long-suffering silver movement, which had pushed for the adoption of metal since the late 19th century.
Source: History.com
Sunday, May 25, 2008
Curse Of The Silver Coins
Traders have long spoken in hushed tones about the silver coin-betting that goes on behind closed doors (including melting the coins to deliver against straight silver futures contracts, which is illegal). Here’s why the U.S. government has decided to take a page from its food-rationing days of World War II and the gasoline-conservation era of the 1970s to impose quotas on yet another precious commodity: 2008 dollar coins known as silver eagles.
The coins, each containing about an ounce of silver, have become so popular among investors seeking alternatives to stocks and real estate that the U.S. Mint can't make them fast enough. In March, the mint stopped taking orders for the bullion coins. Late last month, it began limiting how many coins its 13 authorized buyers world-wide are allowed to purchase.
"This came out of nowhere," says Mark Oliari, owner of Coins 'N Things Inc. in Bridgewater, Mass., one of the biggest buyers of silver eagles. With customers demanding twice as many as they did last year, Mr. Oliari would like to buy 500,000 a week. But the mint will sell him only around 100,000.
The coins have a face value of $1. But the mint sells them for the going price of silver, plus a small premium, to a handful of wholesalers, brokerage companies, precious-metals firms, coin dealers and banks. The dealers mark the coins up a bit more and sell them to the public. Currently, the coins are fetching about $19 apiece, with some sellers seeking more than $20.
For Coins 'N Things alone, the shortage is costing hundreds of thousands of dollars in lost sales of silver eagles. The firm sells about $1 billion worth of precious metal every year, including silver, gold and platinum coins. Mr. Oliari, a 50-year-old numismatist who has been in the business since 1973, sniffs: "You can't print what I want to say about the mint."
The mint, a bureau of the U.S. Treasury, has offered little explanation beyond a memo last month to its dealers. "The unprecedented demand for American Eagle Silver Bullion Coins necessitates our allocating these coins on a weekly basis until we are able to meet demand," the mint wrote. A spokesman declined to elaborate.
The coins, each containing about an ounce of silver, have become so popular among investors seeking alternatives to stocks and real estate that the U.S. Mint can't make them fast enough. In March, the mint stopped taking orders for the bullion coins. Late last month, it began limiting how many coins its 13 authorized buyers world-wide are allowed to purchase.
"This came out of nowhere," says Mark Oliari, owner of Coins 'N Things Inc. in Bridgewater, Mass., one of the biggest buyers of silver eagles. With customers demanding twice as many as they did last year, Mr. Oliari would like to buy 500,000 a week. But the mint will sell him only around 100,000.
The coins have a face value of $1. But the mint sells them for the going price of silver, plus a small premium, to a handful of wholesalers, brokerage companies, precious-metals firms, coin dealers and banks. The dealers mark the coins up a bit more and sell them to the public. Currently, the coins are fetching about $19 apiece, with some sellers seeking more than $20.
For Coins 'N Things alone, the shortage is costing hundreds of thousands of dollars in lost sales of silver eagles. The firm sells about $1 billion worth of precious metal every year, including silver, gold and platinum coins. Mr. Oliari, a 50-year-old numismatist who has been in the business since 1973, sniffs: "You can't print what I want to say about the mint."
The mint, a bureau of the U.S. Treasury, has offered little explanation beyond a memo last month to its dealers. "The unprecedented demand for American Eagle Silver Bullion Coins necessitates our allocating these coins on a weekly basis until we are able to meet demand," the mint wrote. A spokesman declined to elaborate.
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