![]() ![]() But as far as the people on the newly formed “WallStreetSilver” forum are concerned, this is indeed the truth, and they are determined to expose it. Unfortunately, the silver market is quite opaque, and we have no way of knowing whether these allegations are true or not. Allegedly, this can create the false impression that there is an abundance of silver, while in fact, it is in short supply. This situation has been allowed to continue since most traders who purchase futures contracts choose to settle for cash and rarely take delivery of the actual metal. They have claimed that a handful of commercial COMEX traders are holding a large short position that far exceeds the amount of physical silver they actually possess. This has led some players in the precious metals community to argue that its price is being artificially suppressed. Unlike gold, it has not posted a new all-time high, nor is it even close to doing so. Since 2013, the price of silver has remained relatively subdued. This is how the ‘Silver Short Squeeze’ movement came to life. This victory gained the WallStreetBets forum instant fame and inspired others to try and do the same. According to some estimates, this has cost Wall Street firms up to 70 billion dollars and almost bankrupted a prominent hedge fund called Melvin Capital. This triggered a massive short squeeze that sent the stock price up 2,400% in 11 trading days. Traders in the “WallStreetBets” Reddit community noticed this anomaly and decided to exploit it by piling into the stock. Many speculated that it would go under, and as a result, the short interest in the company rose during January to 140% of the available shares. ![]() The company has struggled during the COVID-19 pandemic, and its revenues have been declining. This is exactly what happened recently to the shares of GameStop, an American video game retailer. During a successful short squeeze, the target share’s price can shoot up dramatically as the short sellers are forced to cover their positions at high costs. This is a situation in which a heavily shorted stock (usually held by various hedge funds) is aggressively bought up (in this case, by Reddit investors), forcing the short sellers to exit the market at a loss. Their ultimate goal is to generate what is known as a “short squeeze”. The Silver Short squeeze as retaliation against Wall Street This was revealed in an emotional open letter( Link), which described one trader’s childhood experiences during those rough years and helped galvanize the group. #Silver short squeeze professional#Many hold a grudge against Wall Street, due to its role in the 2008 financial crisis, and are eager to beat the professional investors at their own game. There is also an ideological angle to the story. These individual investors are characterized by the desire for high gains and the willingness to take on a high degree of risk. But the idea is spreading rapidly, and new discussion groups are emerging as we speak. Right now, the epicenter of this activity is a community called “WallStreetBets’, on the Reddit social network. Each may not have a large amount of capital, but together they are a force to be reckoned with. This allows them to concentrate their positions and influence the stock market like never before. For the first time in history, retail investors are not acting independently, but as an organized group. Thousands of young investors are meeting up on internet forums to share information and coordinate their financial plans and actions. What caused this rapid rise and fall in its price? Silver became the target of a short squeeze, as we explain here.Ī new phenomenon is rocking the financial world. Then, if you turned to silver prices, you may have seen some serious fluctuations around the same time – from USD 25.26 / ozt on January 27, then up 15% to USD 29.05 / ozt on February 1, only to drop 8% a week later on February 8, to USD 27.48 / ozt today (February 9th). The Silver Short Squeeze Whether or not you follow business and financial news very closely, you must have noticed much mention of companies like GameStop, Blackberry, and the term “short squeeze”. ![]()
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