COMEX Silver Futures Margin Requirements Reflect Greater Silver Supply

Three Silver Stacked BarsMargins for silver speculators are being reduced for the second time this year. Silver futures margins for some COMEX-monitored silver sellers were raised more than five times in 2011. Those rate hikes nearly doubled COMEX silver positions between March and June of last year. A thirty percent silver price decline was then blamed on the drastic margin requirement changes.

The declining margins for 2012 are seen by many as a way to reverse silver price trends by decreasing trading expense, although companies trading on the COMEX maintain margin changes are a protective mechanism for both participants and the market. Others speculate that lower trading volumes in the first half of 2012 have created a need to attract market liquidity. Lower risk in the silver market following increased market stability is the most logical explanation. Silver demand has seen a slowdown in the first quarter of 2012, bringing COMEX stockpiles to their highest level since 2002.

https://www.silverstrategies.com/story.aspx?local=0&id=32529

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