Gamestop?

[JoeWras]

Ahhh, 70s metal markets. Dad was a tradesman and would pick up little scraps of wire the electricians discarded. He'd give them to me and I'd strip the insulation. I had a nice box of pure copper scrap wire that year.

We also sold some silver coins. I still have a few. Time to go to the safety deposit box and dust them off?

 

[Montecfo]

You do know it is easy to change info in a browser to show any number you want on a screen. How are people not more skeptical?

I thought you were debunking "conspiracy theories"...

 

[MRG]

I thought you were debunking "conspiracy theories"...

[emoji13][emoji56]

 

[Running_Man]

I'm reminded of the Hunt brothers and silver, back when I was in HS and only starting to pay attention to economics, only perhaps in reverse.

I went back to this article to make sure I was remembering that this occurred in the mid70s (as I thought I remembered).

https://www.investopedia.com/articles/optioninvestor/09/silver-thursday-hunt-brothers.asp

This is not the same with Silver, here is the perceived hole in the Silver Market.

Blackrock runs SLV ETF which sells silver and supposedly holds physical silver to back the contracts, but a close read of perspectus shows they only need to hold more than 1/2 of the physical metal and can hold options or futures for the remaining contracts.

In the meantime they are also allowed to allow people to short against the Silver held in the ETF, this is the largest banks in the world. Currently they are short about 300 million ounces. By taking physical silver in hand, while at the same time buying SLV shares you squeeze the shorts and expose that SLV is not actually holding the silver, it is used to wash purchases of silver to hold the price down (someone thinks they are buying silver buys the ETF, ETF only buys 50-60% of the actual silver and a bank immediately shorts that physical silver.

By sending people around the world to buy silver there will not be enough silver to satisfy silver and COMEX may be triggered into rule 589 where no contracts of silver are allowed to process on a day where price increases by more than $12 without enough people willing to sell the silver. It is a very interesting concept.

Virtually every silver dealer in America as well as the Canadian Government has the same stock message on their websites:

https://www.jmbullion.com/silver/silver-bars/all-silver-bars/

 

[Aerides]

Can someone tell me in layman's terms what is expected to happen to the Silver market? (if it's going up I need to buy a lot of my jewelry supplies tonight before the wholesalers adjust!)

 

[Montecfo]

This is not the same with Silver, here is the perceived hole in the Silver Market.

Blackrock runs SLV ETF which sells silver and supposedly holds physical silver to back the contracts, but a close read of perspectus shows they only need to hold more than 1/2 of the physical metal and can hold options or futures for the remaining contracts.

In the meantime they are also allowed to allow people to short against the Silver held in the ETF, this is the largest banks in the world. Currently they are short about 300 million ounces. By taking physical silver in hand, while at the same time buying SLV shares you squeeze the shorts and expose that SLV is not actually holding the silver, it is used to wash purchases of silver to hold the price down (someone thinks they are buying silver buys the ETF, ETF only buys 50-60% of the actual silver and a bank immediately shorts that physical silver.

By sending people around the world to buy silver there will not be enough silver to satisfy silver and COMEX may be triggered into rule 589 where no contracts of silver are allowed to process on a day where price increases by more than $12 without enough people willing to sell the silver. It is a very interesting concept.

Virtually every silver dealer in America as well as the Canadian Government has the same stock message on their websites:

https://www.jmbullion.com/silver/silver-bars/all-silver-bars/

The message did not appear when I clicked the link, but if you go to the site independently it says,

"Attention customers:due to increased order volume, we are currently experiencing shipping delays of 5 -10 days from cleared payment."

 

[CSdot]

Wait until Silver opens it is going to be a real show

Various parties have been trying to break the silver market forever. Someone has already mentioned the Hunt Brothers, who got criminally prosecuted for their hubris. A more recently a group called "crash JP Morgan" took a shot after the 2008 crash:

https://www.theguardian.com/commentisfree/2010/dec/02/jp-morgan-silver-short-selling-crash

The institutional players in the PM market are legitimately more powerful than those on the other side (they've been deemed Too Big To Fail by the US Government), and they will pull out all of the stops to make sure nothing undesirable happens to them.

 

[Running_Man]

The message did not appear when I clicked the link, but if you go to the site independently it says,

"Attention customers:due to increased order volume, we are currently experiencing shipping delays of 5 -10 days from cleared payment."

They are sold out of every item of silver they have

 

[MRG]

They are sold out of every item of silver they have

I've seen posts(WSB?) with people and their silver stash. One was very impressive.

I benefited from the Hunt short, don't have any silver now and I'm not buying.

 

[jim584672]

They have been trying to pump up Silver as the new big thing. Can't see how this gets traction.

 

[Jerry1]

They are sold out of every item of silver they have

Interesting. I just did a quick search, and it appears there is no silver to be had - at least by simple internet search and purchase method. Makes me wonder what the supply is like at the local places like pawn shops and coin dealers. This will be fun to watch. I have a very small amount of silver, but it might be a good time to sell it. Get me some beer money.

 

[ivinsfan]

They have been trying to pump up Silver as the new big thing. Can't see how this gets traction.

Hold my beer!!!

 

[EA-Sports]

This is not the same with Silver, here is the perceived hole in the Silver Market.

Blackrock runs SLV ETF which sells silver and supposedly holds physical silver to back the contracts, but a close read of perspectus shows they only need to hold more than 1/2 of the physical metal and can hold options or futures for the remaining contracts.

In the meantime they are also allowed to allow people to short against the Silver held in the ETF, this is the largest banks in the world. Currently they are short about 300 million ounces. By taking physical silver in hand, while at the same time buying SLV shares you squeeze the shorts and expose that SLV is not actually holding the silver, it is used to wash purchases of silver to hold the price down (someone thinks they are buying silver buys the ETF, ETF only buys 50-60% of the actual silver and a bank immediately shorts that physical silver.

By sending people around the world to buy silver there will not be enough silver to satisfy silver and COMEX may be triggered into rule 589 where no contracts of silver are allowed to process on a day where price increases by more than $12 without enough people willing to sell the silver. It is a very interesting concept.

Virtually every silver dealer in America as well as the Canadian Government has the same stock message on their websites:

https://www.jmbullion.com/silver/silver-bars/all-silver-bars/

So buy SLV or PSLV?

https://www.zerohedge.com/markets/reddit-preparing-unleash-worlds-biggest-short-squeeze-silver?s=08

 

[Running_Man]

Here is a note from APMEX one of the largest silver dealers in the United States:

APMEX Homepage
To our valued customers,
APMEX Statement On Current Market Conditions:

In the last week, we have seen a dramatic shift in Silver demand from our customers. For example, the ratio of ounces sold per day was running about two times earlier in the week and closer to four times the average demand by the end of the week. Once markets closed on Friday, we saw demand hit as much as six times a typical business day and more than 12 times a normal weekend day. Combined with the extremely high demand levels, we are also seeing a surge in new customers. On Saturday alone, we added as many new customers as we usually add in a week.

Any Precious Metal dealer will take a long position in the futures market to protect against spot price exposure when the markets open. We do this because it is our goal not to take a speculative position on metal. The weekends are unique as we are not able to real-time hedge our position. We took an aggressive position this weekend, but clearly could not have predicted the volumes that were seen. We have partnerships around to world that allowed us to cover these long positions, but only to a point. Once we exceeded our comfort levels, we had little choice but to stop the sale of Silver on our website. This was a difficult decision to make and unprecedented in our history.

As we evaluate the markets, it is difficult to know where Silver's price and demand will go in the coming day and weeks. APMEX is highly capitalized and has more than $150 million in inventory to support demand. We have made strategic decisions to procure additional metal, locking up any metal we can find in the market place. We suspect premiums will rise and rise quickly, as we are seeing significant increases in our costs, when we can even locate the metal. It is also highly likely that we will need an additional day or two to fill orders based on current order counts. The one guarantee we can make to our customers is that you will only be sold metal that is on-site, or we have procured the metal with a firm commitment date from our partners. In markets like this, we feel this is the best approach a retailer can take, as no one can predict product availability.

We want to thank our customers for their patience and understanding during these turbulent times. APMEX prides itself on best in class service and delivering on promises to our customers.
Sincerely,
Ken Lewis
CEO, APMEX

 

[Running_Man]

So buy SLV or PSLV?

https://www.zerohedge.com/markets/reddit-preparing-unleash-worlds-biggest-short-squeeze-silver?s=08

Well the goal of the Silver Shorts is to bankrupt SLV....

 

[NW-Bound]

Good grief!

I don't know how silver hoarding will hurt me, but what if the Redditors start a run on TP? Oh wait, that happened already with Covid.

What other commodities can they start hoarding?

 

[Running_Man]

Good grief!

I don't know how silver hoarding will hurt me, but what if the Redditors start a run on TP? Oh wait, that happened already with Covid.

What other commodities can they start hoarding?

https://vimeo.com/313769282

 

[NW-Bound]

Not necessary. Say there is five of a stock. That stock is loaned to a short position and sold into the market to a different firm. That different firm allows someone to short those five shares and sell them into the market. In that small example, there are five outstanding shares with a 200% short position.

No. That's OK, as one guy describes it on the Web.

Let's say that in the beginning, investor A has one share of stock XYZ.

Investor B borrows this share to sell short to investor C.

Now, both A and C are long 1 share, for 2 long shares total. B however is short 1 share. The total number of shares is still 1.


Naked short is indeed illegal. Normally, in order to sell short, you have to borrow the share from someone who is long. This is done with the aid of your broker. If you do not borrow the shares, how are you going to deliver the shares when the trade is settled in the mandatory 3-day period?

It seems to me that naked shorting is only possible with the collusion of the broker or the clearing house to cover up the fact that no shares actually change hands at settlement.

PS. I don't know much about the intricacies of stock settlement. The above is just what I surmise as a layman.

 

[Running_Man]

No. That's OK, as one guy describes it on the Web.

Let's say that in the beginning, investor A has one share of stock XYZ.

Investor B borrows this share to sell short to investor C.

Now, both A and C are long 1 share, for 2 long shares total. B however is short 1 share. The total number of shares is still 1.


Naked short is indeed illegal. Normally, in order to sell short, you have to borrow the share from someone who is long. This is done with the aid of your broker. If you do not borrow the shares, how are you going to deliver the shares when the trade is settled in the mandatory 3-day period?

It seems to me that naked shorting is only possible with the collusion of the broker or the clearing house to cover up the fact that no shares actually change hands at settlement.

PS. I don't know much about the intricacies of stock settlement. The above is just what I surmise as a layman.

I see you answered the question of why Gamestop is selling for $300 a share. As to how Silver could hurt you and the inference that it is no different than hoarding TP, JP Morgan was not short 160 days of production of TP. So why would a major bank be net short 100's of millions of dollars and if they are short what is the impact if they were to incur losses of 10's of billion dollars covering silver? Could the system again end run by reducing the paper price of silver while Physical metal doubles - in 2008 silver fell to $9 while US Treasury increased premium on Silver Eagles from 10 percent to 100 percent and where selling them for $18 when paper silver was $9. All this is possible and interesting, but the eventual conversion of paper to metal is where that profit can be made.

Now in 2019 the silver trader for JP Morgan pleaded guilty to manipulating markets in Silver and Gold ( in order to profit on short sales) and claimed it was done with full knowledge of senior leadership of JP Morgan.) at the time he was 25 years old and trading hundreds of millions in silver contracts. So I find it interesting that JP Morgan would exceed 2007 levels at the present time the amount they are short silver, choosing not to short TP.

If Silver prices rise JP Morgan could well have to sell securities to cover losses, if toilet paper goes into a shortage, well maybe the paper the short contracts in silver were written on could be substituted.

 

[ExFlyBoy5]

This is not the same with Silver, here is the perceived hole in the Silver Market.

Blackrock runs SLV ETF which sells silver and supposedly holds physical silver to back the contracts, but a close read of perspectus shows they only need to hold more than 1/2 of the physical metal and can hold options or futures for the remaining contracts.

In the meantime they are also allowed to allow people to short against the Silver held in the ETF, this is the largest banks in the world. Currently they are short about 300 million ounces. By taking physical silver in hand, while at the same time buying SLV shares you squeeze the shorts and expose that SLV is not actually holding the silver, it is used to wash purchases of silver to hold the price down (someone thinks they are buying silver buys the ETF, ETF only buys 50-60% of the actual silver and a bank immediately shorts that physical silver.

By sending people around the world to buy silver there will not be enough silver to satisfy silver and COMEX may be triggered into rule 589 where no contracts of silver are allowed to process on a day where price increases by more than $12 without enough people willing to sell the silver. It is a very interesting concept.

Virtually every silver dealer in America as well as the Canadian Government has the same stock message on their websites:

https://www.jmbullion.com/silver/silver-bars/all-silver-bars/

So, let's say I have a big arse 100oz bar of silver locked up in my safe. What is the best way to sell it without getting raked over the coals? Not that I am looking to sell it, but if it approaches $50 an ounce, seems pretty stupid to hold onto it.

 

[SecondCor521]

So, let's say I have a big arse 100oz bar of silver locked up in my safe. What is the best way to sell it without getting raked over the coals? Not that I am looking to sell it, but if it approaches $50 an ounce, seems pretty stupid to hold onto it.

Not sure, but if it were me I'd take it to the nearest trustworthy gold and silver shop.

The few times I've bought and sold PM's, they just check the spot price and then pay you a bit less or charge you a bit more than spot.

Although with the shenanigans, who knows, they may discount their bid price below spot to account for the risk that the market turns against them while they hold it.

 

[jim584672]

No. That's OK, as one guy describes it on the Web.

Let's say that in the beginning, investor A has one share of stock XYZ.

Investor B borrows this share to sell short to investor C.

Now, both A and C are long 1 share, for 2 long shares total. B however is short 1 share. The total number of shares is still 1.

Naked short is indeed illegal. Normally, in order to sell short, you have to borrow the share from someone who is long. This is done with the aid of your broker. If you do not borrow the shares, how are you going to deliver the shares when the trade is settled in the mandatory 3-day period?

It seems to me that naked shorting is only possible with the collusion of the broker or the clearing house to cover up the fact that no shares actually change hands at settlement.

PS. I don't know much about the intricacies of stock settlement. The above is just what I surmise as a layman.

In stock settlement no shares actually change hands at the Transfer Agent because Cede & Co. is the sole owner for all brokers. Book entry changes of position are logged internally in DTC. Since brokers are part of the DTC stock loan program a short sale is covered by creation of a stock loan internally between brokers. No short sales are naked, it is accounted for within DTC. The natural consequence is more shares can be floating due to open short sales than actually exist. This is legal and normal.

If everyone stopped using margin accounts it would almost be possible to stop short sales.

 

[dixonge]

Lots of concern being expressed here for the 'little guy' and ignorant youths of the WSB Reddit forum. Keep in mind, the 'B' stands for Bets. From the beginning this 'subreddit' was about taking money you could afford to lose and gambling with it. It is basically a Wild West version of the LOL's Market Timing Newsletter thread here on E-R. Sure, maybe some newbies are betting too much. But mostly people are having fun. I have seen a lot of sentiment there which indicates that they really don't care if they lose it all. They are prepared to 'hodl' and 'to the moon.'

More recently, the last couple of weeks or so, an additional idealogy has come into play. David vs. Goliath. Sticking it to the man. Screw these hedge funds oppressing small companies with their large short positions. Etc., etc. This was not the primary motivation, but it has become a bit of a mantra.

And RobinHood has enjoyed this attention, until they were forced to halt purchases and now the wrath of the mob has been pointed back at them! Lots of voices calling for moving all of their trading somewhere else as soon as 'this' is over. It remains to be seen how many will actually do that though...

One more point about RobinHood. I haven't used it much, but as I understand it, when you buy options, it asks you which direction you expect the stock to move and presents you with a green up arrow and red down arrow. You tap one, and then you are presented w/ strike prices and costs. You scroll to one you want/can afford and tap. That is about the extent of the sophistication involved. How much do these users really understand about options? No idea.

One other thing - this is a massive mob. You can't have an intelligent conversation with three million people at once. It is nigh impossible for any participant to direct the mob, nor for the mob to perceive a direction. So the power of numbers is being massively diluted. And yet they are still showing up in enough numbers to crash servers and push brokerages and hedge funds to the brink of solvency. But how would you regulate that or prosecute it? When hedge funds can gang up on stock positions based on 'idea dinners' how do you justify prosecuting an anonymous Reddit poster because they said "hey everybody, let's all buy GME - to the moon!"

Also note that the big boys are also making out like gangbusters.

"BlackRock owned about 9.2 million shares worth about $174 million in December 2020 according to an SEC filing published on Tuesday. That stake is worth about $3.1 billion right now."

Investment Firms are the Big Winners of the Gamestop Stock Revolution So Far

 

[Time2]

At some point WSB will have to many target stocks and will not be able to recruit enough followers to move those stocks very much.
That may be a route to their ruin, just start pumping dozens of stocks that have some short interest, to spread WSBs readers money thin.

 

[MRG]

In stock settlement no shares actually change hands at the Transfer Agent because Cede & Co. is the sole owner for all brokers. Book entry changes of position are logged internally in DTC. Since brokers are part of the DTC stock loan program a short sale is covered by creation of a stock loan internally between brokers. No short sales are naked, it is accounted for within DTC. The natural consequence is more shares can be floating due to open short sales than actually exist. This is legal and normal.

If everyone stopped using margin accounts it would almost be possible to stop short sales.

+1

That's how I remember it working. Been a lot of years but I remember getting a transmission from the DTC that went into a batch process to sync the accounts with the daily trade activity.