Silver Squeeze?

Silver Squeeze

Over this past weekend, the Stock Jockey’s over at WallStreetBet on Reddit were organizing their next short squeeze. In what you ask? Silver. Big banks have long been short the silver market, many have even said manipulated it. JP Morgan, for example, has been fined billions of dollars for such manipulation. The bet WSB users are making is that if they buy enough of SLV (Silver ETF) they can squeeze many of the large money center banks such as JP Morgan, driving the price of Silver and specifically the Silver ETF up.

What they may not understand though, is that Silver is a commodity traded via the futures markets. In these markets, it is much harder to create such a squeeze, though not impossible as we saw Oil trade negative in 2020. Future markets require funds due in full at time of purchase and commodity either delivered or stored. To create such a squeeze would require real delivery and there simply isn’t enough silver for this to realistically happen.

We think it will be highly unlikely that the WallStreetBet Stock Jockeys will be able to move the Silver market in a similar fashion to the GameStop movement. Odds are very low probability, at this time less than 5% by our measure. BEARISH