A”default” can occur if too many longs stand for delivery. This
very well could happen and the likelihood has risen in just the last 2
trading days as open interest has increased rather than decreased. If 10% of the longs stood for delivery in Silver, the inventory would be wiped out. The
fact that the “drop” in price was CAUSED by new shorts opening
positions rather than longs scurrying away tends support the case that
the long position is a resolute buyer with deep, VERY DEEP pockets. If they hold in and meet the margin calls created by the price drop AND higher (18+%) margin requirements as of yesterday, the
shorts and the exchange itself have a very big problem on their hands
as the availability to deliver on the open interest just does not
exist. .
