Market Curiosity: Exploring Markets And Systems

May 8, 2011

What does it take to tamp down the price of silver 50 cents on a Sunday night? “2’s”

Filed under: Just Watching — Tags: , — Jeff Fitzmyers @ 10:49 pm

So it’s a quite Sunday night and here is what July’s silver price ladder looks like. Wow, seems like a lot of supply, huh??

But wait, look what happens when price dips 5 cents in a a few seconds: single digits.

Where did all that supply go?? Ah, those 20’s are still there. Price just needed to creek up a bit.

The 20’s in their full glory. Who exactly would be supplying 200 contracts in such a machine like fashion?

Removing the 2’s from the 10’s place from the image above yields a more natural looking ladder.

Yes, an entity might wish to sell 200 contracts at that level and so spread out the contracts, but why show everyone what is going on? Why not feed the orders into the market to get a higher price? Wait, what level was that again? 36.15. Let’s see what happened.

And now momentum takes over. No more big asks.

Elementary, a 50 cent drop.

All the CFTC would have to do is look at whose ask’s those 20’s were. It’s not rocket science and does not take a year of investigation.

ps. I wish I was trading that and not writing about it!!!

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