The bid for Silver is above $36 in Shanghai but below $32 at COMEX. ARBITRAGE PLAY EXPLAINED IN DETAIL.
by Jon Forrest Little
Arbitrage: Explained and the difference between COMEX $32 and Shanghai’s $36
The difference between the silver price of 32 (representing the price at the Chicago Mercantile Exchange) and 36 (representing the price at the Shanghai Gold Exchange) is 4. To calculate the percentage price difference, we divide the difference (4) by the lower price (32) and multiply by 100:(4 / 32) x 100 = 12.5%
So the percentage price difference between the two exchanges is 12.5%, with the Shanghai Gold Exchange price being 12.5% higher than the CME price.
Arbitrage is the practice of taking advantage of a price difference between two or more markets by buying an asset at the lower price and simultaneously selling it at the higher price, thereby locking in a risk-free profit. In this scenario, a Hong Kong trader could exploit the arbitrage opportunity by buying silver futures contracts on the CME at $32 and simultaneously selling an equivalent amount of silver futures on the Shanghai Gold Exchange at $36.
For example, if the trader had $1 billion to invest, they could buy approximately 31.25 million ounces of silver futures on the CME (1 billion / 32) and simultaneously sell an equivalent amount of silver futures on the Shanghai Gold Exchange at $36 per ounce.
This would generate revenue of $1.125 billion (31.25 million ounces x $36) while only costing $1 billion, resulting in a risk-free profit of $125 million (1.125 billion - 1 billion).
Don't dismiss the importance of true price discovery is that the more they push the price down at the COMEX and LBMA the greater the arbitrage to ship physical East for a premium. - Jamie Carrasco
Facts
No new Silver Discoveries
Mexico Production now down 29% in less than 19 months
Silver demand has been falsely reported by deceptive Silver Institute data
Solar use now approaching 1 year of mining (table below)
Solar use of 500,000,000 Million ounces is #3 user of Silver
Military and Aerospace continue to be the top 2 silver use categories
When Silver goes 10x it’s always because its role as a monetary metal kicks in
BRICS ++ playbook bundles Gold and Silver together to defeat Federal Reserve note
Federal Reserve is insolvent that is why they won’t answer questions or submit to audit
US banks are failing at alarming rate and the commercial real estate collapse begins this fall of 2024
US treasuries being offloaded by BRICS ++ at the highest intensity since Bretton Woods
Silver is on the Brink of extinction and at the rate of military, aerospace, solar, green energy, AI, robotics, electronics and investment will be unavailable by 2027 maybe before
Naked shorts are getting crushed
Banks CEOs are resigning because they know what is on the short term horizon
The US election will have no impact on global monetary shift to BRICS ++ domination
During big swings like this expect heightened volatility and G7 banks will have no liquidity
More layoffs will intensify the wealth divide.
USA could hang in there if they introduce some kind of FDR public works programs such as Civilian work projects to employ millennials and GenZ ( paint schools, clean up rivers, clean up highways, fix bridges, fix infrastructure, assist with day care, assist with elderly, address housing accessibility, provide mental health assistance, food insecurity and other important public services) THIS IS A NO BRAINER AND NO CANDIDATE IS TALKING ABOUT IT
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