Silver Gold Spread

Quote from drm7:

I show similar results to GLD/SLV on a contract equivalent basis (silver is a 5000oz contract, while gold is 100oz, so multiply the silver by 50 to put it in "gold terms".)

I hope you are long gold/short silver VERY recently, or you have been taking some heat!
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yes, rather recently. so no heat taken
 
If you calculate your hedge ratio based upon notional value, your hedge ratio is 1.2:1 based upon yesterday's settlements.

You must account for the considerable volatility differences, however. Look at the 20 Day Historical Vol for each instrument - Silver is 3.21 times more volatile than Gold. That is not a subtle variation.
 
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