Which analysis is correct ? I am hearing conflicting reports concerning the margin rise related to longs and shorts. I heard that it hurts the longs and by the market reaction, this seems to be substantiated, but there is an article on CNBC.com that says the opposite as follows:
After the close of trading on Wednesday, investors seeking to put on an initial position in the silver futures market will be required to post $8,775 per 5,000 ounce silver contract versus the previous $6,500. And investors with existing positions that are losing money will be asked to post $6,500 instead of $5000 for ongoing “maintenance” margins.
While the new margin requirements make it riskier for traders to make highly speculative bets, it could actually end up being bullish for the markets, says Kevin Grady, a trader for MF Global.
That's because traders with "long" positions—who bet prices will rise—aren't affected while "short" traders—who bet prices will fall—will get squeezed out because they have to put up more money to maintain their bets, he says.
This seems to make sense...... so why did silver sell off so violently....(An excuse to take silver to the woodshed ???)
