Ted Butler: “Piggyback” Traders Legging into Silver Manipulation with “Tens of Thousands” of iShares Silver Trust (NYSE:SLV) July $25/$30 and $25/$33 Bull Put Vertical Spreads and Shorting “Tens of Millions” of Shares of the SLV ETF.
CTFC Commissioners continue their two and a half year long sham investigation of silver price manipulation and illegal trading practices by the JP Morgan Chase (NYSE:JPM) and HSBC banks (1). Mean while, non-commercial traders netted $500 million dollars over the 3-week period immediately surrounding the recent May 1st 30 percent “drive-by-shooting” silver price takedown (2), using computer automated trading “bots” to “transiently create thousands and, sometimes, tens of thousands of intra-day short positions” (3). But these things have all happened before, so we know what to look for, such as: “Create an exit strategy- a good catalyst like Easter weekend, an announcement by an investor etc. or develop a market and grow your own bigger fool. ie – retail.” (4).
Just when you might have thought that the worst must be over, the stage is only being set for the Coup de grâce! Prior to the May 1st “drive-by-shooting” of the silver price takedown, piggyback traders of the automated High-Frequency-Trading (HFT) banks established “tens of thousands” of OUT OF THE MONEY PUT OPTIONS for July expiration (5), forming the debit portion of Bull Put Vertical Spreads. Subsequently, the same piggyback traders are legging into “tens of thousands” of SLV July $25/$30 and $25/$33 Bull Put Vertical Spreads. In addition, the same piggyback traders are in the midst of shorting “Tens of Millions” of shares of the SLV ETF (6,7).
The HFT banks are the midst of “growing their own bigger fools” (i.e. retail). Presently the HFT “bots” are focused on preventing the spot price of silver from penetrating the 50-day SMA from beneath. The purposes of which are to preclude re-entry of the technical traders, restore some semblance of price stability and plausibility, and bide time until the next and more brutal price attack, believed to coincide with the end of QE2 and the July 4th holiday closure of the U.S. markets, to provide extended minimal trading volume opportunity, plausible cover story and requisite exit strategy (3,4).
The criminally complicit conduct of the CTFC Commissioners, the CME Group (Owners of the COMEX and NYMEX exchanges), and the BlackRock company (Trust sponsor of the NYSE iShares SLV ETF), and the underlying illegal conduct of Ms. Blythe Masters’ Global Commodities “Team” for JP Morgan and HSBC banks, have collectively provided a tremendous buying opportunity for “the replacement of weak hands with strong ones” (3).
Ref. 1: “A London trader walks the CFTC through a silver manipulation in advance”, http://www.gata.org/node/8466
Ref. 2: “Biggest Names Discuss Silver”, http://politicalmetals.com/2011/05/21/biggest-names-discuss-silver/
Ref. 3: “Anatomy of Silver Manipulation – How Low Can It Go?”, http://seekingalpha.com/article/268691-anatomy-of-silver-manipulation-how-low-can-it-go
Ref. 4: “Exclusive: Second Whistleblower Emerges – A Deep Insider’s Walkthru To Silver Market Manipulation”, http://www.zerohedge.com/article/exclusive-second-whistleblower-emerges-deep-insiders-walkthru-silver-market-manipulation
Ref. 5: “Silver Options Trader Bets $1 Million on Price Drop by July”, http://www.bloomberg.com/news/2011-04-11/silver-etf-options-trader-bets-1-million-on-37-slide-by-july.html
Ref. 7: “A Hidden Silver Default?”, http://www.investmentrarities.com/ted_butler_comentary/06-16-08.html
Tickers: Sprott Physical Silver Trust (NYSE:PSLV), ProShares Ultra Silver (NYSE:AGQ), ETFS Physical Silver Shares (NYSE:SIVR), PowerShares DB Silver (NYSE:DBS), ProShares UltraShort Silver (NYSE:ZSL), Global X Silver Miners ETF (NYSE:SIL), iShares Silver Trust (NYSE:SLV), SPDR Gold Trust (NYSE:GLD), Silver Wheaton Corp. (NYSE:SLW).
Ted Butler is one of the pre-eminent commentators on the silver market. In addition to his decades following the metal, he’s spent years raising suspicions about silver’s suppression by a few large banks taking on egregiously large short positions.