Investing

Silver (Precious metal) arbitrage opportunity for traders or investors SUN 6PM when the Silver market opens ~2%

  • Last Updated:
  • Sep 21st, 2020 10:15 am
[OP]
Jr. Member
User avatar
Aug 13, 2020
144 posts
441 upvotes

Silver (Precious metal) arbitrage opportunity for traders or investors SUN 6PM when the Silver market opens ~2%

(Disclaimer, I am not a stock broker or a stock market professional and I do own PSLV and PHYS (mentioned in the post below.))

Hello everyone !

There are a lot postings on Redflagdeals.com regarding Investing which is fabulous but I don't see many postings about precious metals so I thought I would share this. I'm not suggesting this is a great deal for everyone but I would like to use this post to open the dialogue and get advice and feedback.

Please note that I don't have any connection to Sprott or anyone in the silver markets. I am someone who loves deals and likes to find creative ways to get rewards. In French, some people would say I'm "débrouillard". This word can't really be translated into English but it means someone that you can trust will get the job done. I guess you could translate this to "MacGyver type of person".

Here is what I am looking at. There could be a very good arbitrage opportunity later today (Sunday) for Silver, the precious metal. As I write this (SUN SEP 20 2020 9h20 PT), the price to buy silver on the stock market is : $26.95 US / Ounce (December price for futures.)

https://finance.yahoo.com/quote/SI=F
yahoo finance.jpg
(Ignore the Market Open message, it's NOT. The silver market will start trading at 6pm ET today (Sunday.))

Here's the possible opportunity. There's a company in Canada called Sprott and they have a "Silver" trust. It's not what people call paper silver, it's actually a "Physical silver bullion trust" so what you are buying is ownership in real silver, in a vault.

The Sprott pricing does NOT correspond to the price of 1 OZ of silver but there is a Sprott / Real Silver ratio and this is where there could be an arbitrage possibility. If you look at the current Sprott to Silver Ratio discount, it's 1.99% :

https://sprott.com/investment-strategie ... -discount/
sprott silver.jpg

What this means is that if you buy Sprott Silver Trust units, you are getting a 1.99% discount off the price of real silver. This is actually a Deal as the percentages are usually Sub 1% or you would pay more (Premium).


Look at gold for instance : .28% discount
https://sprott.com/investment-strategie ... -discount/
sprott gold.jpg

My intent is to see what Silver does between 6pm EST and when the TSX and Nasdaq open. If the ratio is still around 2% I will report back.

What does everyone think of this opportunity?
Has anyone done it or something similar?
Can this be done with Robinhood trading without any fees?
5 replies
Sr. Member
User avatar
May 12, 2012
618 posts
682 upvotes
Richmond Hill, ON
Believe this should be posted in the personal finance subforum, if anywhere else. Unlike mortgage rates, this is a little too niche for the general hot deals? Many people are not aware of the trade dynamics of commodities and precious metals. You'd receive a better response in the aformentioned I feel.
Member
Jul 20, 2018
374 posts
263 upvotes
Ferny111 wrote: Believe this should be posted in the personal finance subforum, if anywhere else. Unlike mortgage rates, this is a little too niche for the general hot deals? Many people are not aware of the trade dynamics of commodities and precious metals. You'd receive a better response in the aformentioned I feel.
True, although I appreciate it nonetheless. I’ll definitely look into this. Thanks OP.
Deal Addict
Aug 17, 2008
4274 posts
3417 upvotes
SEARCH is your friend

gold-silver-miners-time-buy-1880319/

Update: Or try the Short term trading thread if you think you can arb the managed fund.
On this day in 1885, Charles Merrill was born in Green Grove Springs, Fla., the son of a family doctor. With Edmund C. Lynch, he founded Merrill, Lynch & Co. in 1914 to “bring Wall Street to Main Street.”
Member
Jul 22, 2020
259 posts
28 upvotes
IslandDeal wrote: (Disclaimer, I am not a stock broker or a stock market professional and I do own PSLV and PHYS (mentioned in the post below.))

Hello everyone !

There are a lot postings on Redflagdeals.com regarding Investing which is fabulous but I don't see many postings about precious metals so I thought I would share this. I'm not suggesting this is a great deal for everyone but I would like to use this post to open the dialogue and get advice and feedback.

Please note that I don't have any connection to Sprott or anyone in the silver markets. I am someone who loves deals and likes to find creative ways to get rewards. In French, some people would say I'm "débrouillard". This word can't really be translated into English but it means someone that you can trust will get the job done. I guess you could translate this to "MacGyver type of person".

Here is what I am looking at. There could be a very good arbitrage opportunity later today (Sunday) for Silver, the precious metal. As I write this (SUN SEP 20 2020 9h20 PT), the price to buy silver on the stock market is : $26.95 US / Ounce (December price for futures.)

https://finance.yahoo.com/quote/SI=F

yahoo finance.jpg

(Ignore the Market Open message, it's NOT. The silver market will start trading at 6pm ET today (Sunday.))

Here's the possible opportunity. There's a company in Canada called Sprott and they have a "Silver" trust. It's not what people call paper silver, it's actually a "Physical silver bullion trust" so what you are buying is ownership in real silver, in a vault.

The Sprott pricing does NOT correspond to the price of 1 OZ of silver but there is a Sprott / Real Silver ratio and this is where there could be an arbitrage possibility. If you look at the current Sprott to Silver Ratio discount, it's 1.99% :

https://sprott.com/investment-strategie ... -discount/

sprott silver.jpg


What this means is that if you buy Sprott Silver Trust units, you are getting a 1.99% discount off the price of real silver. This is actually a Deal as the percentages are usually Sub 1% or you would pay more (Premium).


Look at gold for instance : .28% discount
https://sprott.com/investment-strategie ... -discount/

sprott gold.jpg


My intent is to see what Silver does between 6pm EST and when the TSX and Nasdaq open. If the ratio is still around 2% I will report back.

What does everyone think of this opportunity?
Has anyone done it or something similar?
Can this be done with Robinhood trading without any fees?
How's the silver price rn? Chk ur DM plz!
[OP]
Jr. Member
User avatar
Aug 13, 2020
144 posts
441 upvotes
GreenLean wrote: How's the silver price rn? Chk ur DM plz!
Hi GreenLean and everyone!

Silver took a Huge dive this morning (Down more than 5%)

silversept21.jpg
and the silver stock went down as well. The Silver Ratio discount is even better at 3.49%
SprottSept21.jpg

I have a long term belief that Silver will out perform the weakening USD and CAD. The more the US and other countries devaluate their currency, the more Silver should go up.

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