In Ted Butler's Archive


Interest in silver and concerns about its price being artificially suppressed by excessive short selling are now at levels never seen before. While those concerns are well-founded, in my opinion, too often the remedy for what to do about it is less clear. Since silver and silver futures trading is regulated by the U.S. Commodity Futures Trading Commission (CFTC), it is the statutory first line of defense against market manipulation. Here’s something that will take only a few moments and has always worked in the past in assuring the agency will, at least, address the issue directly.

If you are concerned that the silver price is being artificially influenced by excessive and manipulative short-selling, please email or send a copy of the enclosed letter to the CFTC. If you would like, substitute your name for your name, and please send it to the addresses of the Commissioners I’ve included. For U.S. citizens, please take an extra few minutes to send a copy to your local representative or senator, asking them to request the CFTC address this matter. I can further assure you that the agency will respond to every inquiry from every elected official who contacts it. Interestingly, this is one of the few completely non-partisan issues of the day, so politics shouldn’t determine whether you contact your elected representatives and senators.

Rostin Behnam
Acting Chairman
U.S. Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581,

Dear Acting Chairman Behnam;

On Feb 1, you stated that the Commission was closely monitoring recent activity in the silver markets, concluding that the agency remains vigilant in surveilling these markets for fraud and manipulation.

As I am sure you are aware, a large segment of the investing public feels that the main source of an alleged fraud and manipulation of the silver market is the documented large concentrated short position in COMEX silver futures.

The Commission had found this issue to be significant enough to post public letters addressing the matter in May of both 2004 and 2008, but clearly the issue has not gone away and has, in fact, intensified.  In terms of real world production, the concentrated short position in COMEX silver futures towers over the concentrated short positions in any other commodity, raising suspicions that it is this short position suppressing the price of silver.

More to the point, the Commission’s own Commitments of Traders report covering positions for the week ended Feb 2, clearly indicate that the 4 largest short sellers in COMEX silver futures added 6,672 new short contracts (33.4 million oz.), establishing a net short position of 65,262 contracts (326.3 million oz.), their highest level in nearly a year, while the largest longs sharply reduced their long positions, further strongly suggesting any manipulation was on the part of the large shorts.

It is hard for a reasonable person to understand how the concentrated short position of only 4 traders can legitimately increase so sharply at a time of widespread evidence of tightness and even unavailability in the wholesale physical silver market. It would have been impossible for silver prices not to have risen much more than they did without this concentrated short selling.

Since it has been nearly 13 years since the Commission has last addressed the issue of the concentrated short position in COMEX silver futures, it would be in the public interest for the Commission to publicly address the matter at this time.

I would urge the Commission to explain how such a large short position by only 4 traders would not suppress the price of silver artificially, or as an alternative, move to order it reduced to levels comparable to other regulated commodities.


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