why I just loaded June calls on the silver train

Quote from Free Thinker:

there is forced liquidation going on somewhere but it should be able to get a bounce tomorrow.
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Forced liquidation or not - the signs of a top following a parabolic move where there, loud and clear over the last 7 days - no hindsight required to determine that - so folks who got slapped have no excuse.

Its interesting when commodities prices collapse - its always margin call excuse given - when in reality is that price has moved up too fast and is out of alignment with just common sense - if it drops too low prices will also be out of alignment with just common sense and those who know what they doing will buy, so will that margin call theory apply then again?
 
Margin calls are a real issue, although I dont think it was a factor in the silver collapse. I think margin calls reinforce the current trend, not reversing them. Anyone long silver was hugely up when silver hit $48.... Why would they have margin issues maintaining their longs?

I have an investor who's an IB in the Midwest, working directly with farmers hedging their crops. When prices move up quickly, he's awash in a flood of margin calls the following 2-3 days... Which of course means prices actually move further up.
 
Quote from Shagi:

Forced liquidation or not - the signs of a top following a parabolic move where there, loud and clear over the last 7 days - no hindsight required to determine that - so folks who got slapped have no excuse.
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I consider this silver move as a Black Swan Event.

"An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. Black swan events are typically random and unexpected. In addition, people look back on the event and contend that they were not surprised that it took place."
 
Quote from ForexForex:

I consider this silver move as a Black Swan Event.

"An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult to predict. Black swan events are typically random and unexpected. In addition, people look back on the event and contend that they were not surprised that it took place."
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There are no surprises here Silver historically always a crashes in days wiping out gains made over months - Dec 2004 crash, May 2006 crash, Dec 2006 crash, March 2008 and now. Nothing new here
 
and if i may add - I can't find any other market that exhibits similar behavioral tendencies on a consistent basis - big move up then followed immediately by a big crash
 
Quote from ForexForex:

Did you read the last sentence in the Black Swan definition I posted?

"In addition, people look back on the event and contend that they were not surprised that it took place."

LOL, it describes you perfectly. :D
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I don't think there's any point in debating this... Not when we can look at it in a quantative way.

Even as silver was peaking at $48, implied vola on silver was as 60%. In daily terms, that means a 4% move in one day is a 1-sigma move. So, the subsequent 10% down days are about a 2.5 sigma move. That means they're unlikely, but in my opinion, hardly a black swan.... The market was anticipating a move almost this large.

On the other hand, in Feb (when crude soared $9/10% in one day after Libya/Egypt instability)... Implied vola was 30% the day prior. That was a 5-sigma move, and does the term "black swan" more justice. In fact, crude vola was down in the 30% range yesterday too.... So today's sell off is another 4+ sigma move.
 
Quote from ForexForex:

Did you read the last sentence in the Black Swan definition I posted?

"In addition, people look back on the event and contend that they were not surprised that it took place."

LOL, it describes you perfectly. :D
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Yes I did. A surprise is something unexpected - like SEALS taking out OBL. I don't consider the silver move in that category. Its not a Black Swan event - because it has happened before in the same market many a times. Those are a just a few recent examples I have listed- go back even further and you will see the same thing over and over again.

Its a black swan event to some who can't be bothered about studying history.
 
Black swan events are typically random and unexpected. For example, the previously successful hedge fund Long Term Capital Management (LTCM) was driven into the ground as a result of the ripple effect caused by the Russian government's debt default. The Russian government's default represents a black swan event because none of LTCM's computer models could have predicted this event and its subsequent effects.
 
Quote from Shagi:

Forced liquidation or not - the signs of a top following a parabolic move where there, loud and clear over the last 7 days - no hindsight required to determine that - so folks who got slapped have no excuse.

Its interesting when commodities prices collapse - its always margin call excuse given - when in reality is that price has moved up too fast and is out of alignment with just common sense - if it drops too low prices will also be out of alignment with just common sense and those who know what they doing will buy, so will that margin call theory apply then again?
More...

Take it easy with your after the fact analysis. Where was your post when slv was at 48? 46? 44? .... oh that's right you were too busy making bullshit posts about obama and osama.

It sure is "common sense" calling a top from 4 days ago, after slv drops 30%..
 
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