We go over the increases in silver futures margins that are now being required on silver positions. The implications of this are:
- For every silver future position, an additional $1000 has to be posted as margin;
- Margin is used when a market has more volatility, such as expecting a bigger price move in a given direction;
- The margin is used as collateral against the futures positions moving against the holder;
- In this case, the exchange is saying they expect larger than normal moves in the price of silver;
- Silver is the only commodity that had an increase in margin requirements, whereas every other commodity was not changed or margin was reduced;
- We infer that larger silver moves are coming on the futures market;
- And the silver shorters will have to put up more money to expand their positions against the silver bulls.
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