"also, could the short bet of $1m. that iShares Silver Trust (SLV) will be at a $25 level by July be based on someone betting that SLV will default or such like as they dont hold any physical silver, only paper futures contracts, therefore the shares will be savagely sold-off by july when their game is found out ? apparently they trade at a $1 discount to the POS atm anyway (according the harvey organ blog)."
From:
http://seekingalpha.com/article/259549-will-jpmorgan-now-make-and-take-delivery-of-its-own-silver-shorts
"Delivery at NYMEX/COMEX is first made to any licensed vault facility. Once the unit of metal arrives, title is transferred to the new owner. The new owner can do whatever he wants with his property. He can remove it from the bailment and take it into his own personal possession. He can transfer to a different vault. Or, he can keep the metal at the initial point of delivery. In many cases, the last option is chosen, so, often the bar never leaves the delivery vault until it is eventually resold and, usually, not even then. Bars can be delivered, and title transferred, without ever having left the vault.
Until now, JP Morgan did not have a NYMEX/COMEX vault license. They had to send silver, for example, to HSBC, Brinks, Scotia Mocatta and/or the Delaware Depository in order to "deliver" it on COMEX. Those vaults have been NYMEX/COMEX licensed for a very long time. But now J.P. Morgan has its own vault license, and the manner in which it seems to have obtained it, is troubling. The bank can now, potentially, deliver short obligations to itself. Yes, you read that correctly. The bank itself, if it still holds short silver positions, and/or the hedge funds/related financial institutions who may have taken over the positions, can now deliver the alleged metal to J.P. Morgan's own vault."
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