These contracts a written against actual silver you tard. Selling these is negative delta, owning silver, which they do, is positive delta. They ratio these to hedge out to zero delta and collect premium. This zero delta eliminates directional risk and so a change in price won’t bankrupt them. The will have to rehedge but the don’t loos the cost of all contracts sold. That fucking idiotic and if I held that position risk would come over and make me hedge, let alone bigger funds.
And I’m not say don’t buy precious metals. physical metals are good to own. I do. It’s a good hedge against the dollar and negative economic conditions.
What I am saying is stop misinforming people by spouting bullshit you don’t understand. Like I said you’re looking at this like you in a McDonald’s. There is much more than just buying and selling raw products in the market
Ya they do own physical silver. But there are only 3billion ounces of phyiscal silver.
And on friday alone they printed 3.5 billion ounces of paper silver.
So their paper silver is backed by physical silver. 250 ounces of paper : 1 ounce of physical.
Now do you see if the price of silver rises that their stock in physical silver will rise in value 1/250 the rate of their contracts in paper they sold?
These contracts a written against actual silver you tard. Selling these is negative delta, owning silver, which they do, is positive delta. They ratio these to hedge out to zero delta and collect premium. This zero delta eliminates directional risk and so a change in price won’t bankrupt them. The will have to rehedge but the don’t loos the cost of all contracts sold. That fucking idiotic and if I held that position risk would come over and make me hedge, let alone bigger funds.
And I’m not say don’t buy precious metals. physical metals are good to own. I do. It’s a good hedge against the dollar and negative economic conditions.
What I am saying is stop misinforming people by spouting bullshit you don’t understand. Like I said you’re looking at this like you in a McDonald’s. There is much more than just buying and selling raw products in the market
Ya they do own physical silver. But there are only 3billion ounces of phyiscal silver. And on friday alone they printed 3.5 billion ounces of paper silver.
So their paper silver is backed by physical silver. 250 ounces of paper : 1 ounce of physical.
Now do you see if the price of silver rises that their stock in physical silver will rise in value 1/250 the rate of their contracts in paper they sold?