Replies to post #855 on ProShares Ultra Silver (AGQ)

[Porgie Tirebiter]

That doesn't make any sense.

If this massive short position really exists, then raising margin would tend to encourage the holders of in the money contracts to go ahead and demand delivery, rather than coming up with the increased cash for margin. I mean, why pay excessive interest on paper silver when you have the right to demand physical delivery? The inability of the shorts to be able to deliver would send the price of silver to infinity and beyond.

I think the massive silver short position is completely fictional. Margins are being raised to make it more expensive to speculate in long futures positions. Exactly like in 1980. This will tend to take the "pump" out of the contracts and the price of the actual asset will tend more toward the mean.