Did CME just cut margin rates on gold and silver?

CaptHenway

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?

MGLICKER

Confirmed.

Text

piecesofme

not lowered enough to have an impact like the way it does when they raise it by this same percentage change.

piecesofme

Absolutely meant nothing because it needs to be cut significantly more to have an impact.

CaptHenway

Thank you!

derryb

normal considering spot price movement

cohodk

<< <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.

derryb

<< <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.

cohodk

All positions are funded.

derryb

my bad. more "minimumly" funded positions. Lower margins mean more positions for the same up front money.

Wingsrule

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.

MGLICKER

<< <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.

coinrollhunter

Mglicker, should crypto be banned as well for saying the exact same thing I said? Or should I be banned because you don't like me? Have you lectured crypto?

jmski52

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.

MGLICKER

<< <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.

cohodk

<< <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.

jmski52

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.

Okay then. Facilitation.