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« Silver Price Forecast: Silver Prices Will Move Much Higher And Faster Than Most People Think | Main | Silver Surges To 21-Month Highs, Gold-Ratio Crashes »
Sunday
Jul032016

A Former NYMEX Trader Explains "The Mechanics Of Silver Manipulation"

Submitted Vincent Lanci, as posted originally on Marketslant

The Mechanics of Silver Manipulation


JPMorgan Chase on Wednesday won the dismissal of three private antitrust lawsuits, including from hedge fund manager Daniel Shak, accusing the largest U.S. bank of rigging a market for silver futures contracts traded on COMEX. The lawsuits accused JPMorgan of having in late 2010 and early 2011 placed artificial bids (i.e., spoofing) onto the trading floor, harassed employees at metals market COMEX to obtain prices it wanted (i.e., intimidation) and made misrepresentations to a committee that set settlement prices. (i.e., manipulating settlements).

What follows is how JPM manipulated the silver markets by selling the Silver contango during illiquid hours, then used their deep pockets to push settlements, then waited until margin calls made the large locals puke their positions. JPM in effect stretched the relationship between forward rates and futures spreads until they made no sense anymore. Not unlike a company trading at 50x earnings. It cannot last long. But it only has to last long enough until the guy with the position opposite you has to liquidate. That guy does not have access to cheap money, political influence or the most physical silver in the world in a single vault at his disposal to create a squeeze.

read more....

The markets in the southern hemisphere have opened and silver has already put on $1.25/oz to trade at $21.00/oz

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