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<p>[QUOTE=&quot;desertgem, post: 1384555, member: 15199&quot;]The contracts being sold were not &quot;delivered silver contracts&quot;. Such contracts are different from being long or short on paper contracts. You can buy a &quot;paper contract&quot; on a percentage of the full price for the delivered amount ( called the margin) and you gain or lose depending on whether silver goes up or goes down and the settlement is in cash. So no ounces of silver are bought or sold by this transaction, contrary to what most try to make it seem.</p><p><br /></p><p>If you want a delivery contract you must put up the full price for the total silver or gold. This may be done by doing this initially or by converting a &quot;non-delivery contract on margin&quot; to a delivery contract by paying the remaining cost before a certain time limit. If you have paid the full costs, then you can take delivery and the metal will be delivered. </p><p><br /></p><p>You can not buy a contract on margin, and decide after the cutoff date to demand delivery. You are out of luck! If you don&#039;t pay the maintenance fees when you are on margin or if the margins go up, you are out of luck. You only get the metal if you have paid all up front which gives the exchange money to obtain the gold/silver for delivery to you. The price of the delivery contract will be determined by the spot ( depending on what &quot;numbers&quot; each exchange uses ) at the time of finalizing the contract.</p><p><br /></p><p>If you are a user of silver, you will generally finalize the price when you initialize a contract, as you do not want any surprises to the upside cost. You may moan if the price comes down by delivery, as you have already settled, and you don&#039;t get the difference back. If you wait until the last chance, you have a better chance of knowing the price, but if you need it, you need it.</p><p><br /></p><p>If you are a speculator, you can either buy on margin and then sell that contract ( non-delivery ) before expiration and pocket or lose the cash difference. ( This a paper trade, no metal changes hands), or for small timers or for more leverage, speculators can buy puts or call options on SLV or GLD ( leveraged paper) based on +/- changes in the price of the stock before expiration ( Again , no metal exchanged). With SLV and GLD, metal is only exchanged in baskets by &quot;principles&quot; trading stock for metal. The average investor can not do this, so unless you are a &quot;principle&quot; like the big banks, you can not demand metal for your shares, it is settled in cash.</p><p><br /></p><p>So, when people want to make it appear that all of the metal dug in the last decades traded hands in a day, they are extrapolating the paper settlement amount to physical metal. Like comparing orange flavored water to real orange juice.</p><p>IMO, I apologize for the length.[/QUOTE]</p><p><br /></p>

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