Silver Open Interest Drops Slightly to 108,858, Backwardation Holds Steady

With a 43% plunge in 3 days, you would expect to see a massive contraction in Open Interest from 113,000 down to something like 70,000-80,000 if a mass capitulation of longs (closing out their contracts due to the bursting of a "bubble") had been the culprit of silver's violent plunge.
Open Interest in Silver today has still BARELY DECLINED, down only ~ 4,000 contracts to 108,858!
As we mentioned last night, it appears that the violent plunge may in fact be JP Morgan attempting attempting to extricate themselves from their 120 million ounce naked short silver position prior to a potential position limit announcement by the CFTC on Oct 4th.


We will continue to keep an eye on OI- if silver has bottomed, expect OI to slowly increase from here in the coming days.
Silver backwardation remains almost unchanged through the collapse as well, with front months through the Jan 13 contract remaining in contango, and March 2013 on out remaining in backwardation.

Daily Settlements for Silver Futures (PRELIMINARY) Trade Date: 09/26/2011
Month	Open	High	Low	Last	Change	Settle	Estimated Volume	Prior Day Open Interest
SEP 11	30.785	30.785	26.585	-	-.124	29.927	180	156
OCT 11	29.695	30.710	26.115	-	-.131	29.929	752	454
NOV 11	29.670	30.870	26.170	-	-.137	29.956	129	57
DEC 11	30.850	30.970	26.150	-	-.125	29.976	103,728	69,238
JAN 12	30.565	30.710	26.340	-	-.127	29.990	153	163
MAR 12	30.300	30.855	26.185	-	-.125	30.005	4,106	10,062
MAY 12	30.755	30.755	28.700A	-	-.120	30.016	704	2,676
JLY 12	29.890	30.540	26.200	-	-.117	30.021	1,521	2,225
SEP 12	29.750	29.750	26.330	-	-.115	29.995	148	628
DEC 12	30.400	30.650	26.200	-	-.110	29.966	1,471	10,289
JAN 13	-	-	-	-	-.107	29.941	-	1
MAR 13	28.210	28.210	28.210	-	-.107	29.891	1	720
MAY 13	-	-	-	-	-.102	29.839	-	125
JLY 13	-	-	-	-	-.101	29.787	35	2,221
DEC 13	27.995	30.165	25.825	-	-.100	29.662	52	7,626
JLY 14	-	-	-	-	-.060	29.457	-	249
DEC 14	26.285	28.500	26.285	-	-.060	29.317	6	1,245
JLY 15	-	-	-	-	-.049	29.033	-	161
DEC 15	28.525	29.345B	24.920	-	-.049	28.818	10	537
JLY 16	-	28.950B	-	-	-.049	28.593	-	25
Total							112,996	108,858