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I got a Margin Call on Silver Future position

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When I first talked about “Margin Call” and explained what it means to my girlfriend she understood that someone will call me say something like this: “Peeter, thank you for your money. You don’t have it anymore.”
The real truth is that no one calls you – just there is no asset anymore and no money also…
I have had two earlier posts on this:

So what happened?
After writing “Background story about buying Silver” in some moment I changed to Silver future from SLV position. First I bought one Silver Mini-Future contract which was approximately for same quantity of Silver than I had in SLV before, so for 2500 ounces. Then it felt good and I thought – let’s take some more risk and I changed to one Silver Future contract, postion for 5000 ounces.

So bacically to make it simple, I put 20 000 USD to my investing account and did these earlier mentioned deals. Today just some moments ago I have 4054,69 USD on my account and no position in anything.

Couple of thing I didn’t take into account:

  • Silver may go down in price. OK, I read a lot of articles about the price in future… and all those suggested rather higher prices… I even read a realistic article that the price should stay between 15 and 30 USD and hoped for 30 :-p
    As long as Silver stayed above 15 USD I had enough funds to cover this position in my account. Today it went under… at least I see SLV price now 14,44 USD.
  • I didn’t take into account that the Exchange NYMEX will lover the Margin needed… I went in knowing that it is 8000 USD and I thought that when my position is worth less it gets sold automatically. They lowered the Margin needed to 5000 USD and as I found out now it got sold automatically when I had 4000 USD left in my account. Good that I didn’t had any other assets on that account 🙂
  • I had no stop order on place… accually I even don’t know how to put this into place :-/

Now I can say this was a costly wake-up call. I better start learning more…

At this point I have the plan to add some funds to this account and buy a new position in Silver Futures when Silver price will go over 14-day moving average or 200-day moving average whichever comes first. So I will at least have some kind of other strategy than buy and pray (Just kidding!).

At this moment I’m looking this information at http://www.kitco.com/charts/techcharts_silver.html
So anyone of you knows where I could find real time chart on it, I would appreciate.

See the original post here:
I got a Margin Call on Silver Future position

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1 Comment

  1. I got a new blog, can I use this info and link back to your articles? It would help me

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