Welcome to the Hotel Silver Futures

There are “Hedge Fund Hotels” and then there is Silver, which is like the Vegas Strip for the 2-and-20 set right now…

Word on the street is that as the Dumb Money began plowing into gold this winter, the Crazy Money came hard into silver.  They bought the few silver mine pure plays, they bought the silver ETF and the pros went and loaded up on silver futures…

From Bloomberg:

Hedge funds boosted bullish bets on silver to the highest in almost four months as tensions in the Middle East sent the metal to a 30-year high.

Managed-money funds held net-long positions, or wagers on rising prices, totaling 35,159 contracts on the Comex as of Feb. 15, U.S. Commodity Futures Trading Commission data showed last week. That’s the most since October. Holdings have gained for three straight weeks, the longest streak since September.

I had a client yell at me for being stopped out of Silver Wheaton ($SLW) in the high 30’s last month.  It was a trailing stop for a position we put on at, like, 9 bucks.  The people that are in silver are absolutely batty about it.  I’m cool with that, but know your neighbors, folks.

If you’re in silver plays, you’re sandwiched by the QE Chorus howling at the moon with quick-trigger hedgies on the other side.

Source:

Hedge Funds Boost Bullish Silver Bets as Mideast Tensions Mount (Bloomberg)