Now Reddit Investors Are Talking About Targeting Silver, And That Could Change EVERYTHING
Scoop Publisher Francesco Abbruzzino
For decades, the big fish on Wall Street have been able to do virtually anything that they want, but now the small fish are fighting back and it has been a beautiful thing to watch. Finally it is payback time, and the losses have been absolutely staggering. In fact, Reuters is reporting that short sellers have lost more than 70 BILLION dollars so far this year. But nobody should be crying for the short sellers. As Charles Payne pointed out during an epic rant on Fox Business, the short sellers have ruthlessly crushed countless businesses over the years, and they did so without showing any mercy whatsoever.
So now the big hedge funds want mercy themselves?
It’s not likely to happen.
After sending GameStop, AMC and other beleaguered stocks into the stratosphere, now investors on Reddit are talking about going after a really huge whale.
The silver market is perfectly primed for an epic short squeeze, and a coordinated assault by retail investors could make it happen.
The following is an excerpt from the post on the “WallStreetBets” Reddit subgroup that everyone is talking about…
The silver futures market has oscillated between having roughly 100-1 and 500-1 ratio of paper traded silver to physical silver, but lets call it 250-1 for now. This means that for every 250 ounces in open interest in the futures market, only 1 actually gets delivered. Most traders would rather settle with cash rather than take delivery of thousands of ounces of silver and have to figure out to store and transport it in the future.
The people naked shorting silver via the futures markets are a couple of large banks and making them pay dearly for their over leveraged naked shorts would be incredible. It’s not Melvin capital on the other side of this trade, its JP Morgan. Time to get some payback for the bailouts and manipulation they’ve done for decades (look up silver manipulation fines that JPM has paid over the years).
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. They aren’t halted and that’s what will make this so fun when the true squeeze happens.