Copper/Silver: Let those 1 oz American Eagles keep soaring
Friday night is my favorite time of the week. You get to reflect on the trading you have done so far, the mistakes you've made, and the opportunities you might have missed.
I was thinking about that book primarily because of the conversations I have been having with clients, colleagues, and friends surrounding the price of Silver. The discussions weren't about the cost of COMEX futures because they actively trade nearly daily. The conversations were about the price of 2022 1 oz American Silver Eagle coins. If I wanted to buy 1000 of these, it would cost me somewhere in the ballpark of , so $39,430.
One characteristic I have is the unemotional ability to make investment decisions, and my goal, as should be yours, is always to try and make money. So if I had $39,430 worth of 2022 1 oz American Silver Eagle coins and Silver went up $10/oz, what would my investment be worth? How am I going to sell those and capitalize on them? Do I take the Eagles to the Pawnshop, sell them on E-Bay or offload them to a friend? That sounds exhausting, let alone the spot price of Silver is a moving target.
What if I took the same $39,430, rounded it up to $41,000, and opened a futures trading account with a brokerage that allows me to get a certificate representing 1000 ounces in a warehouse? Then buy 2 December 1000 oz. futures contracts, store them in the warehouse, wait for Silver to go up $10, and offload them seamlessly. My $41,000 would turn into $61,000 , and I didn't even have to break a sweat. Let alone pay $20,000 in premiums.
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