The CME Group, which controls the NY Mercantile Exchange or COMEX issued a notification this afternoon about Silver margin requirements being raised. Their justification is listed below.
“As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management has approved…”
The The statement goes on to say that effective after the close of business on November 10, 2010, the maintenance margin requirement for COMEX 5000 Silver Trust Futures and COMEX 5000 Silver Trade at Settle will increase from $5,000 to $6,500 per contract.
This announcement came about as silver, and all precious metals were having a stellar day. Silver surpassed $29/oz. gold as high as $1420.
With JP Morgan and HSBC holding such large short positions in silver, and silver on a rocket ship straight up, it makes you wonder how and why the rules would be changed on a whim like this.
After the announcement the gains in silver and other precious metals diminished. Silver dropped from $29.38 to close at 26.98.
Rumor’s floating around out there, that have not been confirmed are saying that the last time adjustments were made like this was during the Hunt brothers era. We don’t like feeding in to consipiracy theories, but it was a notable comment that we felt should be shared.
No matter, keep on eye on your silver holdings as the Asian markets wake up and get wind of this news.
You can see the official statement from the CME Group here;