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Monday, September 26, 2011

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
at