Who's Buying All Those Short Term Calls in Silver?

in investing •  4 months ago  (edited)

   Happy Friday Morning Folks,    

      It seems the term “Buy the Dip” is still the precious metals strategy of the day (and past few months) with Gold trading higher at $1,515.40, up by $5.90 after trading as high as $1,521.10 with the low close by at $1,510.50. Silver is trading in the positive as well with the trade at $17.02, up 7.9 cents after reaching up to $17.14 before being slammed down to $16.93 then the recovering again. The US Dollar is doing another steady Eddie move with the value pegged at 97.35, down 8.4 points and close to the low at 97.31 with the high up at 97.465. All this occurred in the dark, before 5 am pst, the Comex open, and the London close.      

      Our Emerging Markets Currency watch is showing a mostly negative trade period in the overnight session. The Venezuelan currency view has Gold priced at 15,135.06 showing another 54.93 Bolivar’s being added to the price with Silver at 169.987 showing at .25 Bolivar lose. Argentina’s currency now has the price of Gold at 68,455.80 A-Peso’s dropping 253.73 in the overnight with Silver losing 6.592 in A-Peso value with its price pegged at 768.867 Pesos. Turkey’s Lira now has Gold gaining 38.59 T-Lira with the going price at 8,332.04 with Silver seeing minor pressure with its price at 93.5631 down by .0222 T-Lira.    

      August Silver Deliveries are showing a sizable drop in demand with the count now at 256 fully paid for contracts waiting for receipts, proving a drop of 180 physical obligations or EFP’s going to London with a Volume of 10 up on the board with the repeating occurrence being, no trading range. Once again, the opaque parenthesis trades are equaling each other in count between the August and September contracts even though the prices are different and still with no trades posting. The Resolute Longs are causing quite the stir these days with the early morning Overall Open Interest count at 243,791 Overnighters, showing a drop of 1,902 obligations from yesterday’s early morning record breaking OI tally. It must be remembered my count is NOT the closing numbers given at the end of the day. My posted numbers are live and in the early morning. These tallies may reflect the added pressure we see in the early morning trade after the Comex close and the reopening of the global trade. The papers still dominate the price but the obvious stress is here showing plenty of reasons to support the Resolutes that have remained these past few years.     

      We’ve looked over the Open Interest on the Silver Options Board for the rest of this year, matching them against the July 18th calculations showing some changes in count which may help prove the stress the shorts may be under. Back in the month of July, the September Call Options in Silver tallied 19,561 in Open Interest. Now the tally is 25,850 Calls proving a gain of 6,289 and with only 18 days left to go before they expire. The October Call Options tallied 5,104 in July but now total 14,342 posting a gain of 9,238 Calls. Novembers Call count in July had 1,260 total obligations held but now post 4,851 Calls proving a gain of 3,591. Decembers count in July was 84,850 Calls in total but now we have 81,840 proving a drop of 3,010. These numbers may not mean much, but then again, they may mean a lot as we see the totals gaining 16,108 more Calls and in the short term. I do not recall ever seeing the cereal months in the options increase like this but it does seem to me the shorts may be preparing for an unruly exit (let us pray). If a large portion of these held “Long Calls” are in the hands of the commercial shorts, they may be using these “rights to buy” to extract themselves from some of their short positions, that is, if the markets do get unruly.     

      So much is going on in politics, markets, and the issuance's of debt, that the idea of being out of the system is most comforting for many. At the same time there are those that see opportunities in the markets. They are the ones that have remained Resolute and are in a game that one day will work like never before! We remain in support of the Resolutes and whoever those Call buyers are. So keep your precious metals close and in hand, have a wonderful weekend, and remain positive! It drives the shorts nuts! And as always …   

Stay Strong! 

J. Johnson  

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