"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Monday, April 25, 2011

CME Group hikes margin requirements for Silver

After the extreme volatility in silver, it comes as no surprise to see the CMEGroup raise margin requirements for trading silver yet again.

Speculators now need to pony up $12,825 to buy or sell a single full sized silver contract - that is up from $11,745. Maintenance margin now rises to $9,500 from $8,700.

Some of what you are witnessing this evening in silver is due to this change being instituted as brokers are calling clients advising them of the coming change at the end of trading tomorrow (Tuesday).

Emini silver and miNY silver futures are also affected by this change.

Hedgers' margin requirements are being increased to $9,500 from $8,700. Wouldn't it be nice to get hedger margins when the truth is that much of what occurs at the Comex is not hedging but is pure speculation on the part of the perma bear firms.


  1. Hi Dan

    Thanks for the updates.

    There are a couple of issues I am confused about with regard to claims about JPM and CME. There is a lot of information on the web regarding manipulation and price control etc. Perhaps you could comment about these issues on your blog?

    1. Crush JPM to end the Manipulation. JPM are said to have a massive short position on silver on the CME and people are calling for them to be “crushed”.
    a. Could this partly be because that they have a very large stockholding in various unhedged mining companies and wish to hedge their outcome? I often see them listed as a significant (top 20) shareholder in Australian companies on the ASX. Presumably they are large holders of Canadian and US stocks as well.

    2. CME could go broke. The CME does not have enough silver to meet delivery obligations on all contracts and that this could send the CME broke.
    a. Is this really a problem for the CME? I supposed CME would have a clause in any contract saying that the deal is between the buyer and the seller. Presumably contracts can be settled in cash if both the seller and the CME have no physical. CME just have to manage the cash margins to make sure contract holders get paid.
    b. I further supposed that the CME must carry some silver to cover situations where a buyer wants physical silver and a seller is a speculator without any physical.
    i. This inventory gives the buyer some confidence that his future purchase will be in physical, even if the seller does not have any at the time.
    ii. The speculators are necessary for price discovery.

    Clearly I am not a futures trader! I spend hours every day on the web researching this stuff though. Probably others do too and would benefit from your experience.

    Hope you can help,

  2. Thank you for updates ! I always remain confused in between JPM and CME. Could you please explain it with any very simple example..I am trying to getting it but didn't getting anything..might be there some misunderstanding in my mind..

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