Although Open Interest remains high in silver, the CME must need a new flock of investors to fleece in paper metals, as the CME announced after Thursday’s market close a major reduction in gold and silver margins effective after the close Tuesday Feb 12th.
The CME cut gold initial and maintenance margins from $6,600 & $6,000 to $5,940 & $5,400 respectively, and also slashed silver initial & maintenance margins from $12,100 & $11,000 to $10,400 & $9,500, a reduction of 10% in gold & 14% in silver!
For those new to the market who might be wondering why silver margins have been $12,100 while golds have been $6,600 (particularly when a single gold contract is valued at ~ $165,000, while a single silver contract is valued at ~$158,000)….
Silver margins are double those of gold because the cartel had to break the back of silver’s explosive short-squeeze rally in April 2011 with 5 consecutive margin hikes in less than 1 week to prevent silver from taking out the all-time nominal high of $50.35, and exploding to the upside & out of cartel’s ability to cap & control the market.
With silver now in the low $30’s and sentiment only slightly off historic lows, the CME Group appears to believe they have some room to breath by enticing a few more paper traders back in to the COMEX futures pits.
From the CME:
Clearing Member Firms
Chief Financial Officers
Back Office Managers
Thursday, February 07, 2013
To receive advanced notification of Performance Bond (margin) changes, through our free automated mailing list, go to
The rates will be effective after the close of business on
and subscribe to the Performance Bond Rates Advisory Notice listserver.
Current rates as of:
Thursday, February 07, 2013.
Tuesday, February 12, 2013.
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed below.
The rates will be effective after the close of business on Tuesday, February 12, 2013.
Current rates as of:
Thursday, February 07, 2013: