macrocephalopod

Gave in to temptation. Silver futs obviously up but what’a more interesting is the basis (Mar delivery minus May delivery) is positive — for the last thirty years it has been between -0.2 and 0 except for a couple of periods of stress in the physical silver mkt.

Currently sitting at +0.04 and has been trending upward, indicating either high demand for physical silver, or people just unthinkingly piling into the nearest expiry futures contract (probably hit of both).

Obvious trade here is short Mar futures long May futures.

Fair point! My reasoning is that there is no particular fundamental reason for silver to trade lower (or at any price really) but there is a fundamental reason (interest rates) for the spread to go negative.

Well this aged incredibly badly and is the reason I try not to make discretionary calls! Current backwardation is the largest *ever* in the data I have (1990-present)https://twitter.com/Fullcarry/status/1356159548822876162 …

If we look from carry stand point, should we go long the Mar contract instead of shorting it to clip the backwardated yield?