Not as impressive as the February 8 call, but Warren is right, silver was trading at 37.2 when they posted this, and almost to the minute it began its ascent to 38.2 . . .
Just a few thoughts ... two months from here would be mid september - not that far of where last years rally started ... then: obviously they want to see whether 36 holds, that is whether JPM and crowd is strong enough to break 36. Possibly they will be waiting (to buy back) at 36. Possibly they might sell into 36 shortly? If they are not able for two months - to hold the line - then they assume that JPM and crowd is not strong enough - and then the attack will start. So the goal is to align nearby 36 and buy with a tight stop below?
What is the meaning - if silver rallies or just grinds higher the next 2 months?
If they (WB group) are not able for two months - to hold the line - then JPM is stronger - and then they let him go lower - until next time silver gets above 36 ...
What if they have bought (or intend to buy) a huge number of 2 months call options (SLV?) with strike 36 - which will be converted into physical - is there a way to do that?
But I'm not an options guy ...
So far I'm not able to decipher that puzzle ... but maybe Louis or somebody else throw in their 2 cents ...
Hammy, I'm sure the WB guys will be come around and expand on their comment. They love to throw a little mystery meat out there for us to chew on. They will come around when they are ready.
What I take from the comment is JPM may have sold Credit Default Swaps which may be considered in default / triggered after 60 days. Pretty foolish trade.
CDS' are way above my pay grade and I have no access to those markets to know if that is the case though. Pure speculation on my part.
LC ... again unlikely ... it's not "after" but "after consecutive" 60 days ... so one single day interrupts "consecutive" ... also price of 36 is mentioned ... 36 and CDS???
But fully agree on throwing in some meat to make some noise - that's how it works.
Louis - you can't really sell a credit default swap on silver. you can create a structured product whereby 1 counterparty would owe another counterparty a payment if conditions are met (ie, if silver trades above $36 for 60 days). If you think that JPM wrote a contract like this, you need to think about who they would write it to, and what would possibly lead to it being big enough to matter.
I think you guys are putting WAY too much though into this.
it's the 10,000 monkeys syndrome. 10k monkeys on 10k typewriters will eventually reproduce Hamlet if given enough time. Similarly, goofballs on the Yahoo message board will occasionally be correct about price action. That doesn't mean they are in control of (or can predict) the price of silver.
even better: in a market like silver where people will believe WHATEVER you tell them, you can create self fulfilling prophecies! which is why I continue to be confused that you guys (who have consistently demonstrated the ability to think rationally and realistically) want to be a part of that with Wynter Benton!
I'm pretty amazed that Eric Sprott spent last week hyping silver to Chris Martensen, got the Minions all fired up by playing to all of their fears, and then sold his PSLV into that froth... Pretty amazing - and even more amazing that the Silver Minions don't realize it. Remarkable...
(and yes - I would guess that Sprott reinvested the proceeds of his PSLV sales into bullion)
I remember reading a post about WB being a story from a marketing agency getting "out of hand". They outed themselves. But I can't find the link any more. Any idea?
most likely its along the lines of what KD said, they entered an otc/structured deal which gave them a sizeable synthetic net short silver position, to neutralize the directional risk they most likely got delta neutral (i.e. had to buy tons of futures -- depending on size of otc trade), they aren't writing large notional exotic otc derivatives deals to undertake directional risk so that's why they would get delta neutral
it's no different than a guy in the options pit selling a huge buy order of calls and having to hedge by buying futures (he's selling volatility or what he perceives a mispriced option but not taking opinion on direction so must hedge by buying futures)
only difference is everyone can see the flow in the options pit whereas otc deals are only known to the participating parties
maybe WB is someone with intimate knowledge of this activity so knows when the otc trades are done and need to be hedged
Hiptwist, I'm sure you are talking about someone we outed here last month as a fake. The marketing team thing was their theory on WB. Looks Omes and KD have the best theory so far. Any other takers?
It sounds like 36 is the battle line. I'm guessing, if silver were to slip past 36 the 60 consecutive days would reset the next time silver is above 36. The question for me is does WBs team sell its position once below 36? If they do then I think we can expect quite a decline. Parabolic up or parabolic down.
there are several types of options ... double no touch, double one touch, knock-in-opions, barrier options etc. Some I know from currency trading. but it seems they are also possible for commodities. At least according to investopedia.
Now the type of option mentioned seem to be sort of a barrier option. That means a payout for the trader when 36 is hit. No payout when it is not hit. In our case it is opposite. I haven't found such an option, but I guess it should anyway be possible to setup such an option - http://www.investopedia.com/terms/s/SPOT.asp
So if that is possible - it simply means what was written by WB: there is a payout when 36 is not hit - that means WB group is sitting slightly above 36 and will buy whatever comes along. And will eventually with that truckload move into yearend, where the same game as last year is again on. As from August on prices are usually stronger - and as that chinese exchange opens soon (see kwn interview with that wistleblower) - the 60 days are likely only 30 - or less.
Now there are two ways to protect 36 - that is to sit above the number - or to move the price as far away as possible. Last wednesday the price was still near 36 - and then moved sharply away from that number. So I guess the strategy is to push the price higher.
And who knows - maybe WB group also has put options with strike price 36 - for the case 36 is hit. Though not sure whether that makes sense to have both bets running.
In the end still not sure what their strategy is - it could be just up and away like last year. But for that it seems a bit too early in my book. Or it could be paper accumulation near 36 - and below 36 they buy phyiscal and protect with put options.
I really hope that we might get another hint as to what is their strategy.
Wynter benton is back, folks.
26 comments:
Ouch. And the message posted just prior to a 2-dollar surge in silver. Appears to be the same profile. Links.
Well they picked the right time to resurface. This will get interesting again.
oh, brother
LOL
Not as impressive as the February 8 call, but Warren is right, silver was trading at 37.2 when they posted this, and almost to the minute it began its ascent to 38.2 . . .
C'mon Brian you know you love this stuff.
I must admit I do, makes things interesting.
But what is the meaning of "derivative contracts will be triggered" ???
longs, shorts, options .. and what is dependant of 60 trading days?
Or is that just another puzzle?
Just a few thoughts ... two months from here would be mid september - not that far of where last years rally started ... then: obviously they want to see whether 36 holds, that is whether JPM and crowd is strong enough to break 36. Possibly they will be waiting (to buy back) at 36. Possibly they might sell into 36 shortly?
If they are not able for two months - to hold the line - then they assume that JPM and crowd is not strong enough - and then the attack will start.
So the goal is to align nearby 36 and buy with a tight stop below?
What is the meaning - if silver rallies or just grinds higher the next 2 months?
Guess we have some questions left.
correction ...
If they (WB group) are not able for two months - to hold the line - then JPM is stronger - and then they let him go lower - until next time silver gets above 36 ...
why two months???
What if they have bought (or intend to buy) a huge number of 2 months call options (SLV?) with strike 36 - which will be converted into physical - is there a way to do that?
But I'm not an options guy ...
So far I'm not able to decipher that puzzle ... but maybe Louis or somebody else throw in their 2 cents ...
I don't think it is an options story ... "consecutive" seems to be a keyword.
Means if price is once below 36 - contdown starts from 1. That's not a factor with options I guess.
Also obviously there was HUGE buying yesterday after 36 was triggered - so possibly they have already bought something.
Or do they know something about JPMs positions?
Is JPM in trouble with something if price doesn't move below 36 within next 60 days?
Huch just questions left ...
Hammy,
I'm sure the WB guys will be come around and expand on their comment. They love to throw a little mystery meat out there for us to chew on.
They will come around when they are ready.
What I take from the comment is JPM may have sold Credit Default Swaps which may be considered in default / triggered after 60 days. Pretty foolish trade.
CDS' are way above my pay grade and I have no access to those markets to know if that is the case though. Pure speculation on my part.
LC ... again unlikely ... it's not "after" but "after consecutive" 60 days ... so one single day interrupts "consecutive" ... also price of 36 is mentioned ... 36 and CDS???
But fully agree on throwing in some meat to make some noise - that's how it works.
Louis - you can't really sell a credit default swap on silver. you can create a structured product whereby 1 counterparty would owe another counterparty a payment if conditions are met (ie, if silver trades above $36 for 60 days). If you think that JPM wrote a contract like this, you need to think about who they would write it to, and what would possibly lead to it being big enough to matter.
I think you guys are putting WAY too much though into this.
it's the 10,000 monkeys syndrome. 10k monkeys on 10k typewriters will eventually reproduce Hamlet if given enough time. Similarly, goofballs on the Yahoo message board will occasionally be correct about price action. That doesn't mean they are in control of (or can predict) the price of silver.
even better: in a market like silver where people will believe WHATEVER you tell them, you can create self fulfilling prophecies! which is why I continue to be confused that you guys (who have consistently demonstrated the ability to think rationally and realistically) want to be a part of that with Wynter Benton!
Welcome back KD. How was the the vacation?
Anyhoo, I have thrown my 2 cents in there as to what they could possibly mean by their statement. Right or wrong as I said I am still guessing.
WB, Don't leave us hanging here.
louis - it's all vacation for me.
I'm pretty amazed that Eric Sprott spent last week hyping silver to Chris Martensen, got the Minions all fired up by playing to all of their fears, and then sold his PSLV into that froth... Pretty amazing - and even more amazing that the Silver Minions don't realize it. Remarkable...
(and yes - I would guess that Sprott reinvested the proceeds of his PSLV sales into bullion)
I remember reading a post about WB being a story from a marketing agency getting "out of hand". They outed themselves. But I can't find the link any more. Any idea?
most likely its along the lines of what KD said, they entered an otc/structured deal which gave them a sizeable synthetic net short silver position, to neutralize the directional risk they most likely got delta neutral (i.e. had to buy tons of futures -- depending on size of otc trade), they aren't writing large notional exotic otc derivatives deals to undertake directional risk so that's why they would get delta neutral
it's no different than a guy in the options pit selling a huge buy order of calls and having to hedge by buying futures (he's selling volatility or what he perceives a mispriced option but not taking opinion on direction so must hedge by buying futures)
only difference is everyone can see the flow in the options pit whereas otc deals are only known to the participating parties
maybe WB is someone with intimate knowledge of this activity so knows when the otc trades are done and need to be hedged
omes11 ... pretty sure they have that inside knowledge.
Adn what happens if in above deal silvers slips thru 36 for a moment or two?
Hiptwist, I'm sure you are talking about someone we outed here last month as a fake. The marketing team thing was their theory on WB.
Looks Omes and KD have the best theory so far. Any other takers?
Thanks, Louis. So I remembered it correctly but missed the fake-part. And the judgement is still open about WB.
It sounds like 36 is the battle line. I'm guessing, if silver were to slip past 36 the 60 consecutive days would reset the next time silver is above 36. The question for me is does WBs team sell its position once below 36? If they do then I think we can expect quite a decline. Parabolic up or parabolic down.
there are several types of options ... double no touch, double one touch, knock-in-opions, barrier options etc. Some I know from currency trading. but it seems they are also possible for commodities. At least according to investopedia.
Now the type of option mentioned seem to be sort of a barrier option. That means a payout for the trader when 36 is hit. No payout when it is not hit.
In our case it is opposite. I haven't found such an option, but I guess it should anyway be possible to setup such an option - http://www.investopedia.com/terms/s/SPOT.asp
So if that is possible - it simply means what was written by WB: there is a payout when 36 is not hit - that means WB group is sitting slightly above 36 and will buy whatever comes along. And will eventually with that truckload move into yearend, where the same game as last year is again on. As from August on prices are usually stronger - and as that chinese exchange opens soon (see kwn interview with that wistleblower) - the 60 days are likely only 30 - or less.
Now there are two ways to protect 36 - that is to sit above the number - or to move the price as far away as possible.
Last wednesday the price was still near 36 - and then moved sharply away from that number.
So I guess the strategy is to push the price higher.
And who knows - maybe WB group also has put options with strike price 36 - for the case 36 is hit. Though not sure whether that makes sense to have both bets running.
In the end still not sure what their strategy is - it could be just up and away like last year. But for that it seems a bit too early in my book.
Or it could be paper accumulation near 36 - and below 36 they buy phyiscal and protect with put options.
I really hope that we might get another hint as to what is their strategy.
Thanks AG for thinking this through ... we should get a hint soon.
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