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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Square_Dealings who wrote (59418)4/25/2006 9:17:13 PM
From: aknahow  Read Replies (1) of 110194
 
It is possible that they wished to avoid roiling the market prior to final approval. Once shares are issued and trading the premium discount on shares will more effectively determine what amount needs to be purchased and more importantly the purchases will only be made when shares are trading at a sufficient premium to silver. The participants will supply shares to the market by selling shares short, (that are at a premium to silver), and buying silver at the same time.

Thus participants will have no risk and be compensated for the trade by having captured the premium.

But if they just buy silver now they not only potentially put at risk final approval by causing a major spike in silver, but they take the risk of having bought silver into the spike, and the risk of loss should silver decline.
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