http://www.zerohedge.com/article/in...nknown-certainly-scary-silver-margin-increase In an effort to adequately address the inherent risk resulting from this volatility, we are increasing margin requirements on silver derivative contracts to a level EXCEEDING that which the exchanges are implementing This will help silver take another nose dive into the mid to low 30s.
I actually hope they ramp up margins on a load of commodity futures because we'll get some great volatility.
why does increasing silver future margins cause the price to go down. Are there more leveraged players long the market?
You didn't really think all these people buying silver well above the cost of production were sober investors with sufficient capitalization, did you?
Its strange isnt it? They increase margins because of the volatility which in turn reduces liquidity, which increases volatility which is the very reason they say they are increasing margins in the first place.