Over the weekend I did listen to a few podcasts and did read some articles on silver price development. Recently, silver dropped a lot in very short time periods. Biggest down day was the 29th of February, 2012.
My take-aways are:
- silver short-positions are held by only a few hands, biggest holding 15 to 25 % of overall short positions (thus representing a huge agglomeration on one side)
- silver long-positions are held by many hands, and here limitations on the maximum size of your holdings apply
- biggest shorties are huge investment banks, who trigger price drops using the high-frequency trading
- and those hands overall end up as net buyers on days silver drops rapidly.
To see what happened to silver on Feb, 29th check this link: The Great Silver Manipulation.
It is a strange chart with little explanation I can provide. Even if you would think some news came out that day and in this hour - would you sell such large positions if you want to get out of the market with as little loss as possible? No huge position would sell in a rush normally. They do know they would drive the price down. So why this fast and furious sell?
"It's a mystery." :-)
ReplyDelete(I wish I could sound more clever and knowledgeable but since I wouldn't know the price of a ton of silver if it dropped on me, I'll make do with short, mysterious-sounding comments. QED)