Paper vs Physical

[Michal]

https://www.moneymetals.com/news/2017/05/16/paper-vs-physical-silver-market-001075

 

What are your opinions about that guys ?

[HawkHybrid]

biased and misleading.

 

paper contracts are like opening bets on horses.

you can bet as many times the number of horses

taking part in the race as your funds allow you to.

you are not limited by the number of horses

racing or the number of horses alive. part of the

paper contracts is an extension of the physical

market but much of the excess is fiat versus

fiat gambling where the underlying commodity

does not matter.

 

HH

[Stu]

Paper every time, who can be bothered with skanky old metal,taking up valuable space and paying vat on it for the privilege. 

[vand]

9 hours ago, HawkHybrid said:

biased and misleading.

 

paper contracts are like opening bets on horses.

you can bet as many times the number of horses

taking part in the race as your funds allow you to.

you are not limited by the number of horses

racing or the number of horses alive. part of the

paper contracts is an extension of the physical

market but much of the excess is fiat versus

fiat gambling where the underlying commodity

does not matter.

 

HH

this is a terrible analogy.

Horse racing and sporting events are defined events with a definitive endpoint and result. All bets will definitely be resolved either in a binary win or loss. Asset markets - at least in the current paradigm - are continual ongoing markets where contracts can be indefinitely rolled over.

[HawkHybrid]

3 hours ago, vand said:

this is a terrible analogy.

Horse racing and sporting events are defined events with a definitive endpoint and result. All bets will definitely be resolved either in a binary win or loss. Asset markets - at least in the current paradigm - are continual ongoing markets where contracts can be indefinitely rolled over.

 

it's the truth for those willing to open their eyes to

see it.

contrary to conspiracy beliefs, futures contracts

have a defined end date. opening a new futures

contract ie rolling over, requires sufficient funds at

the point of roll over.

speculative bets on futures contacts is gambling

fiat versus fiat. those who claim that futures

contracts are all demand for the underlying metals

is having a laugh.

 

I work with what I have access to and the recent past

has shown that multiple times physical contracts

means nothing for the movement of prices. those who

continuously try to convince others otherwise have only

their own interest in mind when leading people astray.

 

futures contracts are not like a preorder for children's

birthday cakes. many futures contracts are settled in

fiat by choice. these contracts are bought to sell on,

similar to how shops stock products. one of the best

things about dealing in futures contracts is that they

never touch the underlying metal. people who choose to

trade silver do so via paper contracts. this allows them

to not have to worry about the problems/logistics of

having to deal with the physical metal. traders are not

potential buyers of physical metal. they merely trade

prices going up and going down.

why do we have more traders of paper contracts than

we've ever had before? maybe it's because we have a

larger economy/population than before that allows

for more traders?

 

HH

[Abyss]

Consensus PM price managed but so many viewpoints on how long can the game continue with Paper vs Physical and nobody knows the answer. Speculating with leveraged futures then does not matter to the short term trader what the underlying asset is maybe PMs / Energy / Stock Indexes / Forex all that matters volatility, identifiable patterns and trading opportunities that offer good risk to reward ratio. The short term traders do not care about the Paper vs Physical as the future contracts always settled in fiat. Seems to be a lot of debate in the PM community about how PMs price managed but this also happens in other markets such oil and S&P/Nasdaq.

[Michal]

Everything said here has sens at some point of view but... there are people/institutions buying physical gold/silver out there and price of if is determined by this paper markets which doesn't have any reflection in physical. It is like price of horse for plowing field based on amount of bets taken at horse racing, where is the logic ? 

[HawkHybrid]

10 minutes ago, Michal said:

It is like price of horse for plowing field based on amount of bets taken at horse racing, where is the logic ?

 

the paper markets is an extension of the physical market.

there are physical hedges in paper.(miners+buyers of

production)

there are pure paper players.

as long as all players buy/sell in the form that works for

them then it's a working market.

the conspiracy idea that physical is priced incorrectly

because of movement in the paper markets is utter

nonsense. physical silver might be undervalued historically

and over the longer term but as of today it's priced correctly

as a result of a working market. notice how this utter

nonsense about the paper markets only comes up when

silver has been dropping. how many conspiracy theorist

claimed a broken paper market when it was driving up prices

in 2011? (a broken market works both ways, but is magically

unbroken when prices are going up?)

blame the the broken paper market when explaining to

angry people why their 'investment' in silver following your

advice have lost them so much over so many years?

 

HH