Are global markets fixed?
They could be, but maybe not the way that you think.
I considered titling this paper “How I Turned Ten Thousand into Five and a Half Million in Less Than a Year Trading Gold Futures and Options on Gold Shares.” But I actually started with twenty thousand, of which I lost half, and then used the remaining ten thousand to make the five and a half million. In addition, if I hadn’t taken more than three quarters of my capital off the table half way through the process, I would have made over twenty million. The ten thousand to five and a half million was a five-hundred-and-fifty fold increase. If I’d done that well the next year I would have had over a billion. But I didn’t do as well the next year. Why? What was my success dependent on? What needed to be fixed? Find out the truth. Learn the Fixed System. Get the free White Paper here.
HISTORIC EVENT: LBMA SILVER FIX BREAKS, JANUARY 28TH — Silver Markets in Disarray After Benchmark Price FIXED AT $13.58, FAR BELOW REAL WORLD Trades, Spot Price
“This could be the end of the fix.”
London 28/01/2016 – The silver markets was thrown into disarray on Thursday after the LBMA Silver Price was set 84 cents below the spot and futures price this morning.
The LBMA Silver Price – the crucial daily benchmark used by producers and traders around the world to settle silver products and derivatives contracts – was set at $13.58 per ounce.
At the time of the auction, which begins at 12 noon London time, the spot price was at $14.42 per ounce while the futures price on the CME was at $14.415, leaving a number of market participants extremely confused as to what has happened.
“Unfortunately, it is not [a mistake],” Ole Hansen, head of commodity strategy for Saxo Bank, told FastMarkets. “This could be the end of the fix. It took 14 minutes to find a fix – they obviously found a fix way off of the market.”
The difference between the two was nearly six percent but the benchmark cannot be changed, a person familiar with proceedings told FastMarkets.
Another source also suggested that the continued existence of the fix has been put in jeopardy by the huge discrepancy in today’s price, adding that many producers – who still use the price as their daily reference – may have lost significant amounts of money if any contracts have been settled according to the fix.
“A huge number of contracts are still settled on that price,” another said. “This will no doubt cause significant problems.”
The matter is being investigated internally, FastMarkets understands, so CME has no official comment at this time.
The ‘fix’ or ‘benchmark’, as it is now known, is still the global benchmark reference price used by central banks, miners, refiners, jewellers and the surrounding financial industry to settle silver-based contracts.
While some traders continue to use the 24-hourly traded spot price, larger players prefer the snapshot-style daily benchmark to settle bulkier contracts on a traditionally over-the-counter (OTC) market.
The price is set every day by six participants – HSBC, JPMorgan Chase Bank, Mitsui & Co Precious Metals, The Bank of Nova Scotia, Toronto Dominion Bank and UBS – using a system run by CME and Thomson Reuters.
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