Silver Squeeze 2 0 and Wall Street Silver, Explained

what is silver squeeze

To some extent, we have seen a validation of these beliefs – but perhaps not to the extent that many of these rebellious Reddit traders would have wanted. Spot silver prices quickly broke above a key psychological marker at $30 per ounce on February 1st and this is significant because we have not seen these price levels since February 2013. The value of your investments can go down as well as up and you may get back less than you put in. Tax treatment depends on your individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Robinhood’s faced major backlash and several lawsuits for restricting trading of some meme stocks.

what is silver squeeze

Shortly after the news of a possible silver squeeze there were many posts on the subreddit denouncing this move as members sought to distance themselves from the idea. Despite having a consistent motive to the previous short squeezes – a protest against short-selling hedge funds – there are a number of issues when it comes to shorting the silver market. The first and second silver squeezes were said to have been conducted via the world’s largest silver Exchange Traded Fund (ETF), iShares Silver Trust, which has a $15.97 billion market cap at the time of writing. The idea was to buy into the ETF which would force the fund to allocate new shares and purchase silver to back them. A sharp surge in interest in the ETF would lead to a sudden increase in the demand for silver and likely result in a sizeable increase in the price for the commodity. Silver is different in many ways from individual stocks like GameStop, AMC, Blackberry and many more.

Millions Of Google WhatsApp Facebook 2FA Security Codes Leak Online

The price of silver rose less than $4 between Friday the 29th of January and Monday the 1st of February. Thereafter, for the remainder of February prices actually dropped below the spike high but remained above the pre-squeeze levels. Silver prices recorded two consecutive weeks of gains on Friday, following two back-to-back weeks of losses. The big bull run started on January 28, when the silver open price was $25.26 and the low was $24.86.

During the inflationary period in the 1970s, William Hunt, Lamar Hunt and Nelson Hunt set out to corner the market on silver. They purchased both physical assets and paper silver (e.g. futures contracts). For a while in February, silver was the talk of the town in the precious metals world. Internet searches related to buying gold had long dominated similar searches for silver. One look at Google Trends, though, shows that silver overshadowed the yellow metal for an entire week.

what is silver squeeze

The company has struggled during the COVID-19 pandemic, and its revenues have been declining. Many speculated that it would go under, and as a result, the short interest in the company rose during January to 140% of the available shares. Traders in the “WallStreetBets” Reddit community noticed this anomaly and decided to exploit it by piling into the stock. This triggered a massive short squeeze that sent the stock price up 2,400% in 11 trading days. According to some estimates, this has cost Wall Street firms up to 70 billion dollars and almost bankrupted a prominent hedge fund called Melvin Capital.

All from GameStop short squeeze

Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. They may have other tax implications, and may not provide the same, or any, regulatory protection. Exchange rate charges may adversely affect the value of shares in sterling terms, and you could lose money in sterling even if the stock price rises in the currency of origin. Any performance statistics that do not adjust for exchange rate changes are likely to result in an inaccurate portrayal of real returns for sterling-based investors. Nonetheless, it would be unwise to underestimate the purchasing power of retail investors, and the idea of this was clearly demonstrated last week. The task of a short squeeze may be a difficult one, but the fact is that hedge funds are against the ropes while retail traders are throwing the big hooks.

  1. In the early part of 2021, though, it became more than just a typical Reddit gathering.
  2. The value of stocks, shares and any dividend income may fall as well as rise and is not guaranteed, so you may get back less than you invested.
  3. But if the price rises, I’m forced to buy it back at a higher price, and I lose money.
  4. During the inflationary period in the 1970s, William Hunt, Lamar Hunt and Nelson Hunt set out to corner the market on silver.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. The massive reduction in silver used in American coins is a major reason behind this decrease.

Silver Squeeze – The Meme Stock After-Thought that Didn’t Quite Take Off

If there is a pullback, prices may retrace to the $27 to $28 price level. It’s a well-known fact that silver and gold can help you hedge against inflation. The key is purchasing gold and silver before the steep premiums that could culminate as a result of Basel III, the #SilverSqueeze, and inflation.

Silver squeeze explained

We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.Information presented by DailyFX Limited should be construed as market commentary, merely observing economical, political and market conditions. This information is made available for informational purposes only. It is not a solicitation or a recommendation to trade derivatives contracts or securities and should not be construed or interpreted as financial advice.

If you don’t want to worry about market volatility, however, you’ll want to make sure you’re buying the right silver products. Its goal is to closely mimic the performance of the price of silver. “Shares of the Trust are not subject to the same regulatory requirements as mutual funds,” according to the iShares site. @Da Sage But pulling demand across the world on retail cannot hurt. Just wait until Apple and Tesla start buying up the futures and demanding delivery. Ohhhh yeah, and the worlds silver production for the last year was way down because of COVID.

What is the Silver Raid?

They have claimed that a handful of commercial COMEX traders are holding a large short position that far exceeds the amount of physical silver they actually possess. This situation has been allowed to continue since most traders who purchase futures contracts choose to settle for cash and rarely take delivery of the actual metal. Allegedly, this can create the false impression that there is an abundance of silver, while in fact, it is in short supply.

Rotbart & Co. are bullish on silver in the medium to long term and believe it has much more room for further price appreciation due to the above reasons and to its role as a safe-haven asset. If last week’s trading activity is anything to go by, the price of silver is likely to remain highly volatile as traders will be keeping an eye on the “Silversqueeze” hashtag in their ongoing bid to rival Wall Street’s investors. CEO of First Majestic explaining how SLV used ‘paper silver’ for their commitments to source silver as an ETF. I watched the silver price all night that Sunday night into the London open. It hit $30 and was capped there where the banks have strength.COMEX, the next morning increased the margin requirements to buy ‘paper silver’. Silver can’t be squeezed because “the total global market includes over 25 billion ounces of silver.” I don’t buy it.

If ever discovered I would suggest naming it Silveri metallicus. @Robert NYC , I believe there is about 3/4 of an ounce of gold for every man, woman, and child world wide. There is much less silver because its yearly production gets used up. The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article. Traders have also poured into mining firms and coin-selling sites warn of delays in delivering silver amid unprecedented demand.

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