Bullion Vault Users Thread

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Fr. Bill
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Bullion Vault Users Thread
This thread has two purposes:
 
  • To provide a place for users of Bullion Vault to compare notes, share information, and to compare/contrast strategies of buying/selling gold and silver at Bullion Vault.
  • To afford potential users of Bullion Vault a way to learn about BV from those who are active users of it.
 
DO NOT post messages to this thread that generally criticize BV or attempt to persuade users to drop it in favor of alternates. Obviously, if/when users of BV encounter bugs in its interface, or identify ways in which its clients are vulnerable to loss or trouble if they are ignorant of the problems ... then say on, of course.  Otherwise, if you prefer Gold Money, for example, start your own thread for GM users. Or, make your case against BV and in favor of some alternative in a Main Street post.
 
Users of BV have already done their own due diligence and have decided it suits their purposes.  This thread is for like-minded BV users to help one another advance their own agendas using BV.
 
Thanks,
 
Fr. Bill
Edited by admin on 11/08/2014 - 06:27

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Fr. Bill
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My BV Accounts

I have two of them.  My first one was a personal account which I started after trading gold and silver in Kitco's unallocated pool for about nine months.  Two things drove me away from Kitco: (1) Kitco increased their fees for trades to a level that required much larger changes in silver prices in order to make trades profitable, and (2) Kitco's business/tax problems made me worry about the considerable money I had parked in that pool.  Yes, this was many months before MF Global.

My second BV account is a precious metals self-directed IRA.  The account is held in trust by the IRA custodian -- whether it is cash or precious metals.  However, I am able to make dispositions of the assets in the account (cash/metals), and both are at BV.  In other words, it "works" exactly like my regular BV account, except the gains are tax-sheltered.smiley

The biggest snarl in this setup is that I can only perform actions (set buy/sell orders) in one account at a time.

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ink
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I'm in

I'm in :)

Nice of you to start a dedicated thread. We may not share a membership of church but we share our membership of BV :)

I only have one personal account. Approximately 2/3 gold and 1/3 silver. For now I only use it to buy and hold. The transaction costs prevent being able to do quick trades, which i regard as a big downside. But i understand they need their income as well.

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Hi

Just dropping a line that I don't have a BV account and have nothing to add, but will be lurking intently. I've read Fr. Bill's (and others') posts in the past on the topic, and am interested in reading whatever anyone has to share.

truthseeker
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Happy to be here, Padre

I am not sure what I'm going to do with BV.

I like having options. I have some physical G/S and a small amount in metal stocks. But I like the idea of diversifying out-of-country. 

And, even though I am primarily a stacker, I do like the option of being able to quickly convert my BV metals to cash and back - or between gold and silver.

If fact, my first and main idea was to use my BV funds as a way to play the G/S ratio, without the hassle of bringing my physical into the LCS for a swap.

I own just silver currently at BV with the idea as the G/S moves toward 30/1 (or something convinces me that gold is better before that point) I start shifting to gold. 

ink: I find the transaction costs are way smaller than the premiums I would pay at the LCS for a transfer between gold and silver. Not only that, it can be done 24 hours a day should need be.

I will confess I have been doing a bit of "trading" in and out of silver (never more than 1/3 position out of the metal). I will save strategy discussions for other posts - and I would love to get some input from other BVers.

Currently I have one account. I am thinking of opening more in case I really get concerned about getting more cash out of the Canadian banking system and into a position where I can get it into physical quickly. My gut says if things get that bad, I won't be trusting wiring money to BV anyway ... but I am at least thinking about it.

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My accounts

I'm in too :-)

Thanks for setting this up Bill - I don't have much time for regular posting but I'll check back in to see what's happening. 

Only have one account at BV, 0.75 gold, 0.25 silver. Gold partitioned between London and Zurich. 

Taxation on gains - I'll worry about that when I have any. Been making purchases on dips (and a couple of things that looked like dips at the time but turned out not to be) since last October so just a wee bit underwater at the moment. I have a feeling that the situation could get a lot worse before it gets better, but I'm not worried about longer term prospects; ready with some dry powder to buy more.

Definitely intend to trade in and out when possible to maximise profits by selling into strength and re-buying on dips, and it strikes me BV is more instantaneous and flexible for that than a LCS. But have just been holding so far in what feels like a learning phase. 

Major attraction of the BV account to me, aside from security and geographical diversification, is the ease of transactions and purchases. It's all been very quick and smooth. Just waiting for the long term fundamentals to reassert themselves, and to make it all worthwhile (I hope).   

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I wish I could be as

I wish I could be as optimistic as you Rico. The way I see it, is a slow long slide into real impoverishment. I watched the video from the guy who you cited during an earlier post and he offered nothing really other than said promised technological breakthrough's in the future. Of course growth will follow at some stage, but such will be the slide in living standards, it will never bring us back to a more comfortable base. I therefore concur that there is reason to be bearish on these markets.Perhaps I am not as bearish as you but I see your point of view on this. I see that Europe is sliding towards economic slavery and this "crisis" is the stage for leeching away sovereignty of nations into this colossal unelected unaccountable body.

Crazy times!

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General Strategies in BV

Duplicate. 

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Fr. Bill
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General Strategies in BV
I wish I had more sense of how the PM markets move when I started at BV than I do now! So what else is new? devil
 
My allocation between gold and silver is currently (in dollar terms) 66 percent gold 34 percent silver in my regular account, 100 percent silver in the IRA.  The IRA, however, is only 15 percent the size of the regular account -- I inherited half of an IRA owned by Dad when he died a couple of years ago.  As it was so much smaller than the other, I decided to be far more aggressive in trying to grow it while taking minimal distributions from it (I ~do~ have to take an annual distribution from it since Dad was doing so when he passed on).
 
Here, then, is my current strategies:
 
The smaller IRA: as I said, my goal is to grow it as much and as fast as I can figure out how to do.  Presently, my thinking is to attempt to capitalize on the volatility in silver, buying into the dips, selling into rising markets, as RunRunRun suggests.  
 
When this produces good results, they "compound" much faster in the IRA because they're tax-sheltered.
 
This reminds me, by the way, of some undiluted BS shoveled into my lap by a Morgan Stanley Smith Barney (MSSB) "investment counselor" that I also inherited from Dad when he died.  At the time I was a true and thorough newbie to PMs and conventional investments alike.  And, so, I dutifully set myself to learning what I felt required to understand in order to be a good steward of the investments Dad had left me and my brother.  It took about a year for me to begin to grow Really Queasy (1) about the financial future of Western economies in general, and (2) Morgan Stanley Smith Barney's advice on the management of the assets in the account I inherited from Dad.
 
My last endeavor to deploy MSSB for my own benefits came when I asked about gold and silver IRAs -- did MSSB offer such?  The answer was "no."  By this time, I was trading gold and silver in Kitco's pool and was shocked at the greater returns I was getting there when compared to what MSSB was getting for me.  Trading within a tax-sheltered environment looked like a no brainer!
 
The MSSB counselor nearly had a cow while talking to me on the phone one afternoon when he understood what I was contemplating.  "Using an IRA as a trading platform for precious metals is a terrible idea!" he exclaimed in breathless tones. "The IRS will be all over you for doing that!"  No details, of course.  No reference to any regs or statutes.
 
I went on my way, supposing I might never find an IRA custodian allowing me to trade PMs in an IRA.  And, then, I did find such.  Half a dozen or so, as I recall.  When I finally figured out that a self-directed PM IRA is EXACTLY what was being marketed by BV, Gold Money, and several IRA custodial entities ... well, I not only switched the IRA away from MSSB, I closed out all the MSSB investments, closed the MSSB account, and put it all at  BV.  I've never regretted it for one minute.
 
In the larger regular BV accout, I have a two-fold strategy: I "stack" about 75 percent of its value.  In other words, I simply leave it alone.  The other 25 percent, I trade in and out of the market as I do with the IRA account. If/when the value of the trading portion rises to one-third, I move some of it (in my spreadsheet accounting, that is) into the stacking pile, and continue trading with about 25 percent of of the total portfolio value.  
 
All of this is done, by the way, with the silver, not with the gold. The percentage price swings in silver are ever so much greater than for gold, and (consequently) the dips are lower and the spikes are higher, resulting in better buying opportunities during silver smash-downs, and greater gains when silver is rising. 
 
 
 

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truthseeker
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Same general strategy

Okay, here goes:

My BV account is small, but as I did not originally intend it for a "trading" account, I have resisted the urge to sell more than 1/3 of the silver. (Similar strategy to FB's larger "regular" BV account). I never intend to be out of physical for very long - even if I really believe we are in a bear market situation.

My rationale is this BV account is part of my "physical" stack. I only keep an eye at the end of the day on the number of ounces and not the price. I don't care if it is $35 or $26. I just want to add ounces when the opportunity arises.

The problem is 1/3 of a small amount is a very small amount. And I do not gain much on each sell/buy.

Nevertheless, I have been successful in "adding" a several ounces of silver each week to the stack.

Strategies so far:

a) I also use the "sell into strength and buy back the dips" strategy. With one exception:

b) If I happen to notice a triggered "waterfall"  event, and someone has left a bid in, I might sell and hope to buy back lower. I try to take advantage of the occasional "delay" in market as it relates to spot silver.  It has worked so far. But if it does not drop further (a quick V bottom event), I will not hesitate to buy back in quickly at a small loss. (This strategy is not very sound, I admit. lol).

My question for those that trade silver is: How do you deal with the spread between bid/ask? Sometimes it is huge. 

For example, you can sell on the "ask" during a strong move up, but sometimes on the next "dip" the ask does not drop much and I am having a tough time getting a good/fair buy back price.

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@ Fr. Bill

Many thanks for starting this thread.  Great idea!

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Gains

I have an account with about 4.5 kilos silver, opened with the idea that I would have time to move in and out on dips and rallys. Unfortunately I've been a deer in headlights and purchased when ag was $33.  I know I'll be green someday, and it might be one of those cases I don't trade this if we have moves like a year and a half ago. Question. As this is an over seas account, I not sure I understand the what if any  reporting is made to the US as far as trades, gains and losses. Anyone?

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Present

Good initiative !

I have one account, and my ratio currently is 1/10 gold and 9/10 silver. I am more of a silver guy anyway, playing both the scarcity and monetary feature of silver. The reason for the gold is that it is stored in a different BV vault in a different country, to spread some risk.

I promised a follow up to my previous post about BV in main street, regarding a few questions i had. Here are the questions and BV's answers.

===========

Dear Mr.XXXXXX
Thank you for your reply. Whatever happens to your bank, your gold/silver is still tradeable on BullionVault. It wouldn't matter if your bank wasn't receiving money anymore. You could still sell your metal on BullionVault, and then hold the money in the Client Account at Lloyds TSB until you arranged a new exit route.

Yes, we do have strict rules about re-validating a new bank for you. But we are a small, flexible business. And it's our aim to make sure you can realize the full value of your property when you want to. That's why, as well as selling on the BullionVault Order Board, you also have a right of withdrawal. This way, you can take your metal out of the vault, and sell it elsewhere as you choose. Please see our Terms & Conditions for procedure and costs:

http://bullionvault.com/help/terms_and_conditions.html#Right%20of%20withdrawal
http://bullionvault.com/help/tariff.html#Withdrawal%20fee

Furthermore, all gold-owning users have a right to ship between the 3 different vaults. We should like to extend the same right to silver users once new facilities - outside the UK - are opened later this summer.

RE: unsettled charges, BullionVault retains the right to sell a little of your metal to cover expenses, but only after giving you 7 days' notice:

http://bullionvault.com/help/terms_and_conditions_v3.html#Unsettled%20Charges

We haven't yet applied this right, however, choosing instead to take unsettled charges whenever money next passes through a user's account - whether on withdrawal of cash, or a new deposit.
Kind regards,

Adrian Ash
Head of Research
BullionVault.com

Office Tel: +44 (0) 208 6000 130
229 Shepherds Bush Rd
London W6 7AN
United Kingdom

On 16/06/2012 08:47, XXXXX wrote:

Thank you Adrian for your answers!
 
Please allow me some follow up questions.
 
at 2) What if my bank decides to have a bank holiday of a month like what is happening in Italy. What if the bank manager of the collapsed bank will not cooperate in a timely fashion. Seems to me that i am rather stuck then. In other words, i would like to have the reassurance that my silver/money is being tradeable when i want it to be, and trading is not depending on a bank manager cooperating or not. I guess what i am saying is that there should be an escape route in these cases. Can you give me this assurance.
 
at 3) The reason i keep some cash in my account, is to be able to pay the storage fees you are charging without having to sell my bullion. In the case that these funds are not available, because of a bank failure or otherwise, how will you proceed then. Will you sell a bit of my position by force, call it a margin call, or will this unique situation be dealt with in a different fashion.
 
at 4) Is bullionvault planning on making available storage locations for silver outside of the UK ?
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Gaming the bid/ask spread at BV

truthseeker wrote:
My question for those that trade silver is: How do you deal with the spread between bid/ask? Sometimes it is huge.
I'm not entirely sure I know what you're asking about, truthseeker, when you want to know how to "deal with the spread between bid/ask."  I agree -- sometimes it's huge (or appears to be so).  But, one is not tied to the bid/ask numbers you see displayed, for example, on the order board.
 
First, the size of the spread ...
 
Until recently, the order board screen and the market depth screen only displayed prices in dollars/kilo.  Recently, both screens purport to display prices in dollars per troy ounce as well.  And, while I appreciate their attempt to accommodate clients who are used to $/ozt pricing, their implementation of this pricing on the order board and market depth screens is still sort of clunky.  I ~think~ the most accurate data available about the pricing within the BV market is had only when the prices are displayed in $/kg.
 
So, in the discussion below, I'm assuming $/kg pricing.  Since a troy ounce is 31.1034768 grams and there are 1000 grams in a kilogram, then a kilogram of silver is a sliver more than 31.15 troy ounces.  Consequently a change of $1/kg in the price of silver equates to a change of 3.21 cents/ozt in the price of silver.  For a rough guestimate, I mentally figure 3 cents per ozt change for each $1 per kilogram in the prices of silver.
 
Now, what is the spread at BV?  So far as I can tell, "spread" at BV has no relationship to what one sees in the spread in the larger spot markets, such as you find quoted at Kitco, for example. As I type this, the metals page at Kitco  (http://www.kitco.com/market/) shows a bid/ask spread of 28.20/28.30.  The bid/ask on the BV order board for silver at the same time is 907/918 (in $/kg) or 29.16/29.51.
 
In other words, as I type this, the spread (in $/0zt) is 10 cents on the Kitco metals page, and 35 cents at BV.  Note: I have not tried to find a pattern in the relationship of these different spreads.  Has anyone reading this noticed any pattern?
 
At any rate, even though the spread at BV is (at this moment) 35 cents when priced in $/ozt or $11 when priced in $/kg, this does not mean that at BV you must sell at $907 or buy at $918.  I never buy or sell at either the bid or ask prices.  I can't imagine my ever doing so, unless I were selling in some sort of emergency scenario!
 
Let's say I was trying to buy silver this morning (and, I would be if I had the July rent check from my rent house at BV).  I would NOT click on the $918 price on the order board.  Instead, I would enter a buy order over on the right-hand side of the order-board page, specifying a buy price smack in the middle of the displayed spread -- in other words, I'd offer to buy at 912.50, specifying an amount of silver I would buy at that price, so the resultant deal would approximate the amount of money I wished to convert to silver.  
 
When you do this, you will notice that your new bid shows up over on the "Best Bids" side of the order board display, and (for a short while, at least) my split-the-difference bid will indeed be the best one.  
 
And, then, I sit tight and watch for a while.  Sometimes, my bid will be snapped up almost immediately -- i.e. someone will sell to me at the price I've offered (bid).  Other times -- if the BV market is moving up, my bid may be left in the dust as the asking prices inch upward, and the offering prices move upward too, leaving my bid to languish.
 
I do the same when I'm trying to sell silver.  I do not sell at the highest price offered.  I enter a sell order, specifying a price right in the middle of the displayed spread.  The consequences as as I described before -- sometimes someone snaps up my silver at the price I've asked; other times, my ask price just sits there; other times -- if the BV market is dropping -- others offer to sell at a better price than I've offered to sell at, causing my asking price to creep further and further upward away from the mid-point of the spread.
 
The point: The size of the spread displayed at BV is never much of a concern for me unless it is gigantic (say around $25/kg).  In that case, all I need do is wait a few minutes and the spread will shrink.  And, even then, I never buy or sell at the bid or ask prices -- I always enter a buy or a sell order with a price set in the middle of the spread.
 
Does anyone who's traded at BV very much have a different way to game the buy/sell dynamics?

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truthseeker
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More on Bid/Ask

Thanks for the reply, FB. Yes, your answer was helpful - particularly your observations about $/kg being more accurate. I set up my order board in oz. I will start watching more closely.

If I were adding new funds to BV, and wanting to just add to my position, I would likely do as you do - and put an order in between the bid/ask.

However, I am not adding funds lately - so I am doing a bit of trading. In that case the strategy depends on the situation. For example, If I am selling some silver in a spiking market, I will look to see where the next big sell order is and place my sell order slightly below it. This might be ABOVE any other very small sell orders. My thinking is anyone buying will take out the small orders (including mine) before they bite into the next big sale order. (Hope that makes some sense, grammatically if not strategically. Ha)

When I place an order in a static (not big dipping or not big spiking) market, I usually go in several cents above/below the current bid/ask - rather than in the middle, for example. So if I am buying, and the bid is 28.13, I would likely go in at 28.16. If I felt the market was ready to move on me, I might be tempted to actually buy at the ask.

The reason for this is I do notice (although not consistently) that there is a lag at BV when the spot price makes a major move. Any one else notice that?

So if I was buying, and the bid was 28.13 and the ask was 28.33, and I see spot silver shoot up in rhino horn fashion, there is not likely to be someone selling to me below the current ask - and once the market adjusts to the big move, the ask will be higher anyway. So I figure to get in before the market moves away from me.

My question about "what to do" about the big difference in bid/ask is for short-term trading purposes. It is going to be hard to explain in writing but I will try.

My goal at BV is to be fully invested almost all of the time. This is part of my "stack". My goal is to slowly increase my ounces by taking advantage of big spikes/dips by quickly selling and buying back in. But, the last thing I want to do is sell a part of my position during a spike and have to buy back a lot higher - and lose ounces from my "stack". This would happen if you sell too soon into a spike and it keeps going up. That is always a risk. I understand. And fair enough. You pays your money you take your chances... but so far I have been successful.

But here is the catch: I have been very accurate in selling for a good price into spikes. The problem is even when the price comes back a bit after the spike, the large difference in the bid/ask makes the trade risky.

In the spot market the bid and ask would usually be very close to the spot price (I assume?). But at BV that is not necessarily the case. 

I am a small fry and I am happy to add an ounce of silver on a trade. Even if I just trade a few times a week, I can add 2 ounces of silver a week to my stack. For a small trader the 30 cents between bid and ask is huge. 

For example, I plan to sell 100 ounces at $30 (on a big spike), and buy back at $29.50, I would theoretically gain one ounce after commissions. (Crude example, the math may not be exact).

BUT, if I sell at $30 in a spiking market, even if the price of spot silver settles back to $29.50 (i.e. I made a good "call"), the bid/ask may very well be $29.45 / $29.85. So I place my bid in between - say $29.50 - and it just sits there and sits there. Spot may even drop further to $29.40 and my bid will just sit there. If I go in between bid/ask, say $29.60, I might get my silver, but not nearly my one ounce.

I just wish the bid/ask were tighter - and more related to the current spot price.

Look right now at BV! Spot is about $28.03 - and has been for a few hours.

The bid/ask is $28.49/$28.62! If you sold at $28.50 earlier today (when silver spiked to $28.50), and saw it drop back down to $28.03, surely one would expect the bid/ask to be near that spot price! But it is not.

See what I mean?

truthseeker
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Seriously

With silver now under $28, why is the bid ask still way above spot? ($28.37 bid / $28.49 ask)

This is one of the quirks of BV ... it does not always follow spot. One can only speculate why. (No one wants to sell for 1% above spot price because they believe silver is about to go up and not down tonight?? Who knows?)

truthseeker
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Looks like it would have been a good sell :-)

In my previous post, I wondered why, with spot at $27.95, why BV had buyers bidding at $28.39. That was curious.

The bidders sure didn't know what they were doing, did they? lol

I will keep that in mind about BV ... when the bid/ask get too far away from spot price ... it might be a good trading opportunity.

truthseeker
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Anybody watching BV silver?

I was a bit disappointed this thread didn't turn into more of an active discussion of BV.

I am still actively trading at BV, trying to slowly increase my bullion position as we move along. So far so good for me.

The bid/ask on silver has been most curious in the last several days. Clearly there isn't much interest to sell silver at this level. Not only is the bid/ask way about current spot silver price  - I've never seen this before - there aren't really many sell orders near spot at all.

I can't quite figure out what this means. Silver has dropped to low levels before to a point the majority might thing a bottom is in, but the bid/ask usually is closer to the spot price.

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