Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
S&P Stock Market Detailed Trend Forecast Into End 2024 - 25th Apr 24
US Presidential Election Year Equity Performance in the Presence of an Inverted Yield Curve- 25th Apr 24
Stock Market "Bullish Buzz" Reaches Highest Level in 53 Years - 25th Apr 24
Managing Your Public Image When Accused Of Allegations - 25th Apr 24
Friday Stock Market CRASH Following Israel Attack on Iranian Nuclear Facilities - 19th Apr 24
All Measures to Combat Global Warming Are Smoke and Mirrors! - 18th Apr 24
Cisco Then vs. Nvidia Now - 18th Apr 24
Is the Biden Administration Trying To Destroy the Dollar? - 18th Apr 24
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Short-Free Price" For Silver is $101.35

Commodities / Gold and Silver 2012 Dec 15, 2012 - 01:41 PM GMT

By: Submissions

Commodities

Afcarl submits:

"Short-Free Price" For Silver is $101.35 ( $33.11 + $68.24 ) Dollars Per Ounce:
 
The Silver Short-Free Price or SFP, is simply the Silver Spot price ($33.11/oz) plus the price increase ($68.24/oz) that would result from the purchase of all the current Silver Short contracts on the COMEX (117,651 Contracts of 5000 oz per contract). As the number of Silver Short contracts are reduced to zero, the Silver "Short-Free Price" becomes equal to the Silver Spot price.

The Short-Free Silver Price clearly demonstrates and quantifies the manipulative COMEX market impact of large short contract positions, and the importance of position limits on the COMEX enforced by the CFTC.
 
HOW TO DETERMINE THE SHORT-FREE SILVER (or GOLD) PRICE:
 
The "Short-Free" Price is equal to the last day close spot price plus the "Equivilent Short Delta Price Increment", or ESDPI, associated with purchasing the total number of ounces of gold or silver corresponding the the total short contracts for the same last day close, and computed as:
 
SFP = ( last day close Spot Price ) + ( last day close "ESDPI")
 
The "Equivilent Short Delta Price Increment", or ESDPI, may be calculated by looking at the total number of Short COMEX contracts and the "Historical Market Impact", or HMI, and the total number of Short COMEX contracts, and computed as:
 
ESDPI= ( Total number of COMEX Short contracts ) x ( Number of ounces per COMEX contract ) x ( "HMI" in dollars per ounce )
 
The "Historical Market Impact", or HMI, may be calculated by looking at various recent historical instances of large sell-offs or purchases, where the corresponding volume of ounces sold or purchased from a single historical transaction or tight batch executed together, and the observed change in spot price associated with the transaction volume can be matched together, and computed as:
 
HMI = ( change in spot price associated with the historical transaction / transaction volume in ounces associated with the historical transaction )
 
EXAMPLE:
 
Given:
    a) Spot price immediately prior to historical transaction = $33.01 per oz.
    b) Spot price immediately after historical transaction = $32.72 per oz.
    c) Volume of historical transaction = 500 contracts
    d) Number of ounces per contract = 5000 oz.
    e) Last day close Spot price = $33.11 per oz
    f) Current Total Number of Short COMEX Contracts = 117,651 contracts
 
HMI = ( $33.01 - $32.72 per oz. ) / ( ( 500 contracts ) x ( 5000 oz per contract ) ) = 0.000000116 $/oz
 
ESDPI = ( 117,651 Short contracts ) x ( 5000 oz/contract ) x ( 0.000000116 $/oz ) = $68.24 per oz
 
SFP = ( $33.11 per oz. ) + ( $68.24 per oz. ) = $101.35 per oz.
 
The SFP and the ESDPI may also be computed on an individual Short contract holder (read: JPM) basis to more readily demonstrate the impact of the individual entities all by themself to further substaniate and quantify market manipulation as a direct consequence of large short positions, and the importance of position limits.
 
NOTE: The pre- and post- transaction spot prices were taken from the Kitco 24 Hour Spot Silver (Bid) chart for December 7th, 2012 at approx. 8:15 a.m. NY Time price drop. For the purposes of the example, It was assumed that the price drop was due to the "non-profit" sale of 500 contracts. Access to volume information would provide a more accure number. The Last day close Spot price was obtained for the same date from the same chart published in the Ed Steer's Gold & Silver Daily Newsletter for Saturday, December 8th, 2012. The number of Current Total Short COMEX contracts was also obtained from the comentary in the same date Newsletter. Better data would obviously result in a more accurate answer.
 
SUMMARY:
 
    The reoccurring theme, is that the CTFC Commissioners refusal to enforce the law has signaled to all parties in the physical silver COMEX futures market, the NYSE and all the various other exchanges in which the trading of silver-related stocks and options are conducted, is that it is open season for manipulation of the silver and silver related markets, regardless of how illegal and blatant it has become, and regardless of how damaging it has been and will continue to be to the multitude of small private investors.

By AfCarl


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in