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Message:: [QUOTE="medoraman, post: 1473616, member: 26302"]I never said it was "right" either sir. Btw basis is simply the assumed premium you have to pay to buy it locally, so the example would be if a farmer can sell corn for $6.50 locally but the futures was $6, his basis is $.50. If the market goes to $7 but he can sell for $7.50 then his basis has not changed. Physical hedgers need to pay attention to basis, because you can win on a future but still lose if your basis changes. Why this is important for PM is the premium for physical silver, (basis), usually goes up when the market is low. This can cause collectors to not be able to buy at CME prices. Like I said, the CME is not in the business to set PM prices, they earn no money from collectors by setting their PM values at the local store or on Ebay. I believe we use it since its the closest to a "market" we have for physical PM. I don't think its right, the CME does not care if its right, but its used. If we don't use it, what would the alternative be? That is the problem. Anyway, I thought it was just interesting what I learned, and could, if not change minds, allow us to view the "evil" CME in a somewhat different light. I believe they are truly befuddled why they catch heat for the physical PM prices when they literally don't want anything to do with it, they simply want to run a market for their customers.[/QUOTE]