How big is the impact of a $1 fluctuation in silver prices? Last Friday’s silver price clearly marked the first time bears admitted defeat, leading to an overbought situation. Today, silver prices are swinging wildly, and there’s a ton of rumors about silver. Let’s estimate the approximate risk exposure for silver. (1) Futures market risk exposure From the New York commodity futures market, there are roughly 160,000 contracts, corresponding to 800 million ounces of silver. From the Shanghai Exchange, there are 720,000 contracts, corresponding to 350 million ounces of silver. Combined, that’s about 1.2 billion ounces. (2) OTC risk exposure This is very hard to estimate. Gemini’s estimate for OTC exposure is around 3 billion ounces. This 3 billion ounces seems reasonable because, as John Hull mentioned in his book, the global forwards market is more than twice the size of the futures market. Adding futures + OTC together: Total silver risk exposure ≈ 4–5 billion ounces A $10 fluctuation would mean $40–50 billion. What kind of trading opportunity is this? Is anyone already positioning themselves?