Silver (SLV): Potential Short Squeeze Runner

Silver has been the most shorted bullion in history. Wall Street investment firms such as JP Morgan has a history of manipulating precious metal Silver, who are often quoted as the most largest silver manipulators with the largest silver short position.

For those that do not know, here are some facts regarding the paper contracts in Silver and Gold. When I go line up to buy physical bullion, my purchases do not impact the prices of Silver. The paper market dictates the price of Silver. Since it is paper, and not many actually take physical delivery of Silver, large funds and banks CAN and HAVE shorted more than the entire world’s supply of Silver. Many Silver bulls think that this manipulation is what has been keeping the prices of both Gold and Silver suppressed.

So we know manipulation exists, and now WallStreetBets turn their eyes on Silver.

The way the squeeze could occur is by forcing a much higher percentage of the futures contracts to actually deliver physical silver. There is very little silver in the COMEX vaults or available to actually be use to deliver, and if they have to start buying en masse on the open market they will drive the price massively higher. There is no way to magically create more physical silver in the world that is ready to be delivered. With a stock you can eventually just issue more shares if the price rises too much, but this simply isn’t the case here. The futures market is kind of the wild west of the financial world. Real commodities are being traded, and if you are short, you literally have to deliver thousands of ounces of silver per contract if the holder on the other side demands it. If you remember oil going negative back in May, that was possible because futures are allowed to trade to their true value.

The silver market is much larger than GME in terms of notional value, but there is very little physical silver actually readily available (think about the difference between total shares and the shares in the active float for a stock), and the paper silver trading hands in the futures market is hundreds of times larger than what is available. Thus, when they are forced to actually deliver physical silver it will create a massive short squeeze where an absurd amount of silver will be sought after (to fulfill their contractually obligated delivery) with very little available to actually buy. They are naked shorting silver and will have to cover all at once and the float as a percentage of the total silver stock globally is truly miniscule.

Jake Page
Jake Page

Investor of 4 years and Managing Editor of Money Midnight, a news outlet focused on highly profitable investment ideas and bold underground research.

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