Message:

<p>[QUOTE=&quot;desertgem, post: 1177232, member: 15199&quot;]For the most part the basics are correct, but their understanding of the process is hazy.</p><p>In the first URl they say:</p><p><br /></p><p>Well the first mistake is that SLV is a 1:1 ratio, and it is GLD that is the 1:10 ratio ( i share GLD = 1/10 oz gold. So 50,000 shares is only 50,000 ounces. And the Authorized Participants are the banks/brokerages that &quot;own&quot; the SLV trust, and they would not do anything to bring the trust in default such as decreasing silver supply below needed levels or increasing it above needed levels.&nbsp; The second URL makes it a little clearer,</p><p><br /></p><p>SO when silver physical price decreased, the shares of SLV that were cashed in, accumulated in baskets of 50,000 shares. So then the trust had to sell 50,000 ounces of silver in their keeping for every basket of 50,000 shares redeemed&nbsp; to replace the cash they paid out. If 50,000 shares of SLV was sold the next day, they would have to buy 50,000 ounces of silver to put into the trust account. That is why the SLV price does not track exactly the price of silver, even considering the trust charges to the holder, as there is some hysteresis due to the trust buy/selling.</p><p><br /></p><p>Either some people didn&#039;t think it out carefully or it was an &quot;urban legend&quot;. If I had enough to buy a basket worth of silver ( 50,000 oz. ) I would do the future market route and avoid SLV charges, both buying the SLV shares, and redeeming them. Same basically for GLD.</p><p><br /></p><p>Jim[/QUOTE]</p><p><br /></p>

Your name or email address:

Do you already have an account?

• No, create an account now.
• Yes, my password is:
• Forgot your password?

Stay logged in