How to trigger a short-squeeze?

[Hank Rearden]

Hey there,

I've been a long time lurker on these boards, and finally decided to get the ball rolling.

Anyways, I was considering the bizarre situation with the heavy short contracts on the COMEX, and I was asking myself: Is there a way to trigger a short squeeze?

I would wonder if someone with a decent sized margin buying ability were to purchase a bunch of silver, a sizable amount at an extremely high price. Say, 50,000 oz at 15.00oz would trigger it?

I might just be fiddling with ideas, but I was thinking that if this market is truly manipulated - why not strike back and start pushing the prices up?

Or a better question: how much/many contracts would be needed in order to trigger a short squeeze and get those 23,000 short positions to start covering their non-deliverable contracts?

[silver_surfer]

i think 50,000 oz would be peanuts....

[Hank Rearden]

i think 50,000 oz would be peanuts....

That's what I thought at first, but then I remembered that lone trader back in the spring that sent the oil futures skyrocketing because of the one contract he bought for $200/barrel.

Anyone remember that? I don't recall the specifics, but it was one trader who was able to send oil futures flying.

[nuslvrkwen]

I think your post is a wonderful idea! But I agree with Silver Surfer you'd need a large amount to purchase like 200K ounces set the price up like you were stating, around $15+ an ounce then go back and purchase another 150K ounces at a comparable price, like $13.50 an oz. about a week later.

I don't trade on margin myself, but this is about how Bear Stearns was made affordable for take over. In that scenario the price was unbelievably low compared to what the stock price was trading at at the time. Its' money flowed out of that company electronically over a two week period. That's why I suggested the second buy order. It's like your price can be created by trapping the number you want.

[Hank Rearden]

I think your post is a wonderful idea! But I agree with Silver Surfer you'd need a large amount to purchase like 200K ounces set the price up like you were stating, around $15+ an ounce then go back and purchase another 150K ounces at a comparable price, like $13.50 an oz. about a week later.


Right. That's what I figured. Essentially, a price could finally be determined.

The thing is, it would have to be enough of a squeeze in order to either shake out the shorts, or just force them to short a higher price.

So I guess a better question would be... what is the price/amount of contracts that are needed to CAUSE the squeeze?

I do believe that once the squeeze would happen, if there is manipulation, we could shake it out. But, if the market was absent of manipulation, after a few weeks the price would drop back down to it's current level, no?

[cdavport]

if there is manipulation, we could shake it out. But, if the market was absent of manipulation, after a few weeks the price would drop back down to it's current level, no?


It seems we are past the point of "if there is manipulation".

http://news.silverseek.com/TedButler/1226344970.php
The issue is how can a short position of 25% of the world production of any commodity, held by one or two U.S. banks, not be manipulative?

[strongman shelford]

Ok, this can only happens in the silverbug forum.

Some poor guys trying to knock down JPMORGAN with a few pennies.

You need to use your congressmen . That will be a better strategy than trying to fight against those who control the dollar printing press

[dontnojack]

So Hank...Who is John Galt??

[MikeJ]

Everyone American should use their stimulus check to buy silver or gold. Then you'll see something happen, lol.

[nuslvrkwen]

Where's main1event and goldragon when you need them! :p They trade and could tell us based on the volume of trades and holdings at present, being mindful of current COMEX inventory, how much and how many the market would need to tip it to positive.

[hiyosilver]

maybe they're broke...

ok, which one of you guys is going to go out and buy 200,000 ounces for $15 per ounce first? I'll wait and let you know if it works...