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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: Patrick Slevin who wrote (7362)	5/1/2006 12:52:47 AM
From: jennifersilversun	Read Replies (2) \| Respond to of 8010

Last Thursday, when silver crashed 2 dollars in one day--what exactly happened? I understand that at one point COMEX suspended silver trading for awhile--was that because the price drop was too large that it automatically triggered a suspension? Silver being so small and volatile, I'm wondering if in regards to futures if the price drops might not nuke your stops--you buy silver at 14 with a stop at 13.20, but then panic elephant stampede selling sets in and the price goes from 13.60 to 13.05 without anyone bothering to stop and snap up your stop. muddling thru jss

To: Patrick Slevin who wrote (7362)	5/1/2006 9:14:07 AM
From: Louis V. Lambrecht	Read Replies (3) \| Respond to of 8010

Since you trade the futes you can browse through the mergins requirements at several exchanges. Maintenance margins turn around 5% of the contract value, initial margin = 1.35maintenance. This rates does not change often. I would remain the same for years, or if there really is a large difference between the objective (5%) and actual prices. For a commodity as oil, and given the huge rally, the margins are specified through a certain date, currently Jul 06. Indeed, some g group of people will use the margin increase on the metals as a proof for their agenda. Prices are manipulated by the shorts. Forgetting that for each speculative long contract, there has to be a short. When everyone is going long, the other party only can be a commercial. In my COT charts. I translate commercial net shorts increase as a sign of more non-commercial long speculators entering the market. Underlaying or miners? With the fast price increase of the metals, IMHO only marginal existing producers can profit. If you would mine silver at total cost of $8/oz., POS below $8 can value the company at a factor of the reserves in the ground. Above $8, the company makes profit and woud start to be valued at positive cash flow. At $10, wow, the company makes huge profit, people buy the shares. At $12, profits disappoint: what? Only double the cashflow? Share can rise some percents, not doubling or tripling as it did when it became profitable. I don't know of explorers which would have advanced projects (= close to become a mine and sell the metal) based on POS $10. As it takes years for the explorer to identify deposits, chances are that only the projets with concentrations able to deliver at $5-$8 have been advamced. Talk of cashflow again, and time, in order to make cashflow, these projects need to turn into mining = heavy investments, dearer every day on a falling Dollar. IMO, at current prices, very few companies would see the share price do better of the metal. OK, buy the metal? Less risk: unless you find companies doing better or go on par. Buy futures? Not on an US exchange. Not any investment on any US exchange. These can close "in the interest of the small owner" without any warning, or lauch the propaganda machine "be patriotic, support the economy, buy shares". Sounds familiar? I would be more confident with Canadian CEF which has been there for a while, or the other GOLD trusts (London and Australia, same mnemo ticker but different exchange rules and NAV). Last but not least, there is a report about futures clearing: the accounts would need an average of 3 weeks (an average!) to be cleared. The industry would like to be given a month to get the accounts squared. If futures, options on futures: these are a contract on a contract. If you have good relations with your broker, and he has good ones with the seat, you could at least get the premium back. For small positions they might accept to nil the trade. I am at that point where I still am bullish the metal, but have no idea on how to play it.