“The targeting of Wall Street may be misplaced as most big banks hold short positions in the silver futures markets to hedge their physical holdings,” wroteĬhief market strategist at FXTM, on Monday. Many small investors might have realized there is no clear evidence that any big Wall Street institution has a significant net-short position on silver. That doesn’t seem to be happening, though, as the sentiment on Reddit has significantly shifted since late Monday. If the WallStreetBets community is still fervent about the silver trade, CME’s announcement shouldn’t stop them from piling more money into ETFs like the iShares Silver Trust. The change will come into force after the end of trading Tuesday, and it will make it harder for smaller players without enough cash on the side to participate.īut such changes shouldn’t affect ETFs. Which operates silver futures and options trading in New York, said it was raising the margin required to trade silver futures, which means investors will need to put up more collateral to ensure they can meet their obligations. The silver rally has quickly retreated on Tuesday, however, falling nearly 10% to $26.67 a troy ounce as of midday. The sudden spike in ETF demand, along with high volume of trading on the futures market, pushed silver prices to its eight-year high on Monday. Hundreds of millions of dollars were poured into such funds-mostly to the $18 billion iShares Silver Trust-pushing broker-dealers to buy and deliver more bullion to them. Since most retail investors don’t have the access or knowledge to trade futures, and it would take a lot more effort to find physical coins, silver-backed ETFs have become the easy route to go. Solar panels, electric cars, electronics and many other products need more silver than ever.” “At the same time, demand is skyrocketing. There is a severe supply shortage developing,” wrote one poster on WallsStreetBets from last Friday. “All of the best mines for silver have already been depleted in recent years. Having succeeded in doing so, some Reddit traders seemed to have turned their attention to silver, based on claims that banks are manipulating the precious metal to keep its price way below market value and that big Wall Street institutions will be hurt by a rally in silver prices. (AMC), and forced the hedge funds with short positions in these stocks to cover their losses-in what’s called a “short squeeze”-which only pushed the prices even higher. In a coordinated move, the Reddit traders have bidden up the price in a group of small-cap stocks including
Over the past few weeks, retail traders on Reddit forum WallsStreetBets have been targeting stocks with high short interest from hedge funds, who are betting those names would fall in price.
#Ishare silver trust professional
That’s about 40% of the depositories held at vaults linked to the CME Group’s Comex and London Bullion Market Association.Īlthough silver has given back most of the gains on Tuesday and fallen back to around $26.67 per troy ounce, the move signified how ETFs-an instrument easy to access for all investors, professional or retail-can bring unexpected volatility to the commodity market. As of Monday, the iShares Silver Trust alone was holding more than 620 million ounces of silver.
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