Globex Silver Crash Update

Another key event, CME Group raised margins for silver contracts for the third time in a week. Standard 5,000oz silver contracts will rise initial margin to $16,200 from $14,513 and maintenance margins have been increased to $12,000 from $10,750. The CME released the news today, and the increases will take effect after tomorrow's trading session. It is possible this would spur a sell off in what was a very thin market but a build up of sellers providing strong resistance met the profit takers and down we went (Globex has imposed no increase in margin requirements.)

The speculation of motive or motives achieves little in the way of tradeable information at this point. The key being this is a natural, well needed rain in a barren desert of profits, the margin hikes won't drive out many speculators for long, but rather decrease the amount of contracts small and undercapitalized traders can successfully trade. $50.00 was a profit taking point, plain and simple, for many and those who settled for $49 and change, well they had the longs pay for their fortune. I am willing to come in a take new long options positions at lower levels, and wait to come back into the trade if silver sells down below it's 50day moving average toward support at $36. But honestly I will start dollar cost averaging into 2013 Jan SLV LEAPS if we stay range bound too long.