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<p>[QUOTE=&quot;mrbrklyn, post: 441860, member: 4381&quot;]Except for when a large number of silver contracts come due on the same day, they have no real impact on the spot price.&nbsp; It does affect the futures price.&nbsp; If the futures contact is for $30 for an ounce of silver and the spot is $10 for an ounce of silver, I stand to make $20 because I will give the contractee one ounce of silver which cost me $10 and I get $30 in return on the contract date, if the price remains the same.&nbsp; </p><p><br /></p><p>If I sell it I want sell my half of the contract I can sell&nbsp; it. I&#039;d ask $20.00 for it and if you purchase it for $20 but your liable for the ounce of silver (an additional $10).&nbsp; If you think the price is going further down, you would buy my contract.&nbsp; If you think it is going to go up, you want to buy the OTHER side of the contract, where you receive the silver for $30 cash.&nbsp; The person owning that half of the contract is losing money recieving $10 in silver and I paid $30.&nbsp; I&#039;m a loss of $20.&nbsp; Who would buy this?&nbsp; Someone who believes the spot is going to rise over $30 before the contract date.&nbsp; If you think the price of silver will go up to $50, you&#039;d be willing to purchase the contract for up to $20.&nbsp; </p><p><br /></p><p>In any event, these contract are NOT on the market, per se.&nbsp; The silver transaction is not recorded as a sale for $30 on the day the contract is due.&nbsp; HOWEVER, if you have 10 metric tons of silver in that contract, when it is due, the day it is due, someone has to go to the spot market and purchase 10 metric tons of silver, and THAT feeds demand.&nbsp; If might also feed supply as well increasing supply if the price is higher than the contract, because someone will likely cash out his silver to take a profit.</p><p><br /></p><p>And that is how futures options indirectly affect the spot price.</p><p><br /></p><p>Ruben[/QUOTE]</p><p><br /></p>

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