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<p>[QUOTE=&quot;medoraman, post: 1697111, member: 26302&quot;]I don&#039;t understand. If I have 1000 ounces of silver, and wish to protect the value, I sell it today on the COMEX. If when the contract comes due I no longer own the silver, I close the position and pocket the cash. The cash from that position makes me whole when combined with the sales prices I sold it for. Effectively if I sold at $32, but markets declined to $23, I can sell my silver at $23 and still be whole because I will pocket the difference between $32 and $23 on the contract. Now, if I jack up the prices to my customers because, &quot;I have more than that in it&quot;, and sell for $28, I just pocketed and EXTRA PROFIT of $5000. Make it 100,000 ounces, and the dealer will pocket an extra half a million dollars this month.</p><p><br /></p><p>I use contracts all of the time to protect physical inventories. That is how I thought they worked. Maybe I am doing it wrong.[/QUOTE]</p><p><br /></p>

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