Did CME just cut margin rates on gold and silver?
CaptHenway
Posts: 32,151 ✭✭✭✭✭
Over on the dealer-to-dealer network one dealer said that late today margins were cut by 10-15%. Can anybody confirm or deny that?
Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
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"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>normal considering spot price movement >>
Exactly. Lower price requires less capital to maintain a position, just as a higher price requires more capital.
No conspiracy or manipulation.
Knowledge is the enemy of fear
<< <i>
<< <i>normal considering spot price movement >>
Exactly. Lower price requires less capital to maintain a position, just as a higher price requires more capital.
No conspiracy or manipulation. >>
And less capital enables more unfunded positions. Sorta like manipulation.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Knowledge is the enemy of fear
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Over the last few years, there has been no correlation between the direction of the margin change and the direction of the price of silver over the following week. >>
Logical to adjust margins to clearinghouse risk. Reckless to use it to tamp down fast markets.
It depends. If you consider that these are leveraged positions, I do agree that it makes sense to stimulate trading when the market is slow and to slow things down when the market gets heated up.
I knew it would happen.
<< <i>Logical to adjust margins to clearinghouse risk. Reckless to use it to tamp down fast markets.
It depends. If you consider that these are leveraged positions, I do agree that it makes sense to stimulate trading when the market is slow and to slow things down when the market gets heated up. >>
Disagree. Margin hikes should be used only to minimize risk of default in a potentially fast market. Conversely, lowered in a perceived less volatile environment. To attempt to alter trading patterns is open to abuse.
<< <i>Logical to adjust margins to clearinghouse risk. Reckless to use it to tamp down fast markets.
It depends. If you consider that these are leveraged positions, I do agree that it makes sense to stimulate trading when the market is slow and to slow things down when the market gets heated up. >>
There is no stimulation. It simply costs less to buy 5000 oz silver today than a month ago therefore less capital is required to initiate and maintain a position.
Knowledge is the enemy of fear
Okay then. Facilitation.
I knew it would happen.