Not Sure What To Do?!!?!

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Gibboslv
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Not Sure What To Do?!!?!

Hi, I have been thinking about selling 1/10th of my stack so that i can paper trade for the upcoming run up. It only amounts to 25 or so ounces and i will be trading through Spread betting, I did this in April and made a nice amount what made me debt free.  I guess what I'm trying to ask is should I sell some of my physical to try on make more on a leveraged product??

Edited by admin on 11/08/2014 - 06:09
Kid Salami
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hey gibbo - I presume that

hey gibbo - I presume that you bought the silver with the VAFT on it? Selling that is painful. I guess you're using IGIndex - have you thought of applying for a credit card with 0% on purchases and buying credits on IGindex with this? I can verify that with my Tesco visa card there wasn't the cash premium or anything, the deposit to IGIndex went through as a regular purchase. 0% until January and I'm doing the same - waiting until a good point soon to start stepping in and hopefully ride the gold and/or silver move upwards and so hopefully could return the money in January at no or little cost.

As an aside, I'd just bought physical and watched everyone on Turd's old site make money hand over fist on the way up to $50. At about $46 I decided i had enough of this and stepped in with some spread betting - placed bets on the worst 3 moments possible (and, I have to admit, disobeyed some fundamental rules) and lost £800! Ha ha - and my brother had warned me this would happen, that it was much harder than it looked. So have been doing my homework this time.....

Warren Peace
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Is your house in order?

Options on futures contracts should be the last area to deploy resources after some basic preparedness has been met. This may be elementary but, these things are important. IMHO the following is a good breakdown of resource deployment...

Please take a look at the preparedness thread to make sure you have a basic preparedness to make it though emergencies that are certainly coming.

That said, I think using unsecured credit lines like CC to help with getting prepared, or to buy physical, or options, is a great idea. When TS really HTF, everyone is going to default on fiat debt anyway. Besides, you may be able to retire that debt by selling 1/10 of the gains you made in the PMs. This strategy has worked very well to buy physical. I bought silver in '08 when trading at $10/oz with credit cards. I was able to lock in these CC balances at that time to 2.99% and 3.99% respectively for the life of the balance. One has been paid off, but I still make the minimum payment on the other. Lets calculate the gains I made on the silver: 33-10=23, 23/10=2.3, 2.3*100=230%. Hmmm, I think that worked out ok. Timing is of course important, I was lucky to get those purchases at the near bottom in '08. I remember how down everyone in pm's was back then. A few of the seasoned traders (Sinclair et al) were pounding the drum to buy when blood is in the streets. They were the lone voice in the wilderness though. So here is a trading tip: use leverage, and make your biggest purchases when blood is in the streets and the mood is gloomy for most traders.

The COT data, and the mad dash short covering by the commercials is very similar to the '08 capitulation. There could be some more downside short term, perhaps as far as 28. But maybe not, and a trigger event could happen at any time to send us back towards 40. When u buy is your choice, but next year this time, when silver is somewhere over 50, you will be happy to have bought at 33, or 30, or 28, or even 40. If it gets down to 28, I'll be using leverage again in addition to my regular accumulation.

Jake
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Gibboslv wrote: Hi, I have

Gibboslv wrote:

Hi, I have been thinking about selling 1/10th of my stack so that i can paper trade for the upcoming run up. It only amounts to 25 or so ounces and i will be trading through Spread betting, I did this in April and made a nice amount what made me debt free.  I guess what I'm trying to ask is should I sell some of my physical to try on make more on a leveraged product??

Think about the overall cost of what you're contemplating here.

1. You paid a premium for that silver ---Figure out what percentage you paid.

2. You'll pay some fees/commissions/spread costs, etc. to set this trading thing up.

3. With options it's hard to make very much with the amounts you're talking about. twenty-five oz. x 34 = $850. Are you sure this is the amount? Also, you pretty much need to be right and you need to be right-right now with options.

4. There is a high percentage you'll lose even with a price rise in the metal unless you can trade to cover your cost. Seems unlikely, meaning the odds are stacked against you.

5.   Assuming you make money, the silver price probably will also be more expensive. Let's say you double your money and your leverage is 3/1? so silver will have increased in price by $2? Ok---so you have $1700 to buy back silver priced at $37 including premiums? Less taxes on the paper gains of about $127?---That's  42 oz.? --for a gain of 17 oz. ?=that's $629 total. Now...had you held on to your silver and it gained that much, you'd have $50 more---so really you're total opportunity gain assuming your right and everything goes as planned---is $579. 579/850 = 68% on a trade that assumes you must double your money to get it?...32% costs ( this assumes no commish/fees slippage and spread costs on the options).

6. Hold on to your silver!

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Your Silver--I Want to Buy it! Sell Me Your Silver!

tmosley
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Exceptionally bad idea.  If

Exceptionally bad idea.  If you get out of physical and into paper for the coming "run-up", that portion that you sold will be lost to you, as paper has been and will continue to decouple from physical.

Sockeye
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"'Win or lose, everybody gets

"'Win or lose, everybody gets what they want from the market. Some people like to lose, so they win by losing money....'"

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I am almost always wrong. But the fun in life is those few times when I am right.

Vypuero
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Save some fiat instead

...use that for trading.  Don't use your physical, keep it.  Don't worry about missing out - could do what I did, double then almost triple my money (fiat) then lose it all.

Desert Fox
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Vypuero wrote: ...use that

Vypuero wrote:

...use that for trading.  Don't use your physical, keep it.  Don't worry about missing out - could do what I did, double then almost triple my money (fiat) then lose it all.

,,,ain't that the truth. lolwink

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