Market Curiosity: Exploring Markets And Systems

February 18, 2011

Backwardation: LBMA getting into a submarine

Filed under: Just Watching — Tags: , , , , — Jeff Fitzmyers @ 8:03 am

James Turk – Short Squeeze in Silver Could Be the Big On…normally we go into option expiration and both gold and silver will be under pressure. This is the first time we’re going into option expiry with silver in backwardation. That’s why I have been stressing the potential for a short squeeze as we move towards the end of February.

Ed Steer: One of the things I found of interest was the fact that March open interest is hardly declining…but open interest in May increased by many thousands of contracts. We’re only seven business days away from First Day Notice for March delivery in silver…so these numbers are a bit of a surprise…and all these contracts either have to be rolled…or they will end up on the First Day Notice list.

Even as price is going up, the backwardations are getting more pronounced.

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