SILVER 0.30% $15.25 silver futures

this guy needs to re-evaluate what he thinks critical thinking...

  1. 9,759 Posts.
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    this guy needs to re-evaluate what he thinks critical thinking is

    if you take a comex call option based on 'paper' gold futures prices you have legal claim to the physical delivery. some will argue the seller may default on delivery as an example of hidden 'real price' of gold being higher - but thats actually not a defence, any more than it is when a seller renigs on selling a property despite having accepted an offer.

    butmore than this - the reality is that coins and bars sold in retail amounts command a higher price than wholesale pricing and so you cant use these as indicators of the ratio

    in the same way that you pay more for a 600ml coke at a 7-11 than for 2L at Woolies.

    there are flaws to all approaches.

    the most important factor is to use the same measures over time.

    so the crucial test is what the paper gold/silver ratio was over timeframe - or retail physical

    but its only a rule of thumb regardless -like dow ratios etc - it tells you something about relative cheapness - not timing or even reversion rate/scale on any reliable basis

 
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