Another margin increase !!!By Tatyana ShumskyOf DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Exchange operator CME Group Inc. (CME) raisedmargins for Comex silver futures for the second time this week as silverprices soar amid much volatility.
The higher margins take effect at the close of trading Friday, theexchange said. The CME revises its margin requirements as a normalcourse of business, and has previously raised bond requirements duringtimes of high volatility to guard traders against additional risk. Theoperator owns New York Mercantile Exchange, which trades silver on itsComex division.
For speculators in the benchmark 5,000-ounce silver futures contract,the exchange is raising initial margin requirements, or the depositrequired to purchase a contract, to $14,513 per contract, up from$12,825. Maintenance margin requirements, or the additional capitalneeded to keep the contract overnight, will increase to $10,750, from$9,500.
For hedgers and exchange members, both the initial and maintenancemargin requirements will also increase to $10,750 from $9,500 percontract.
CME also raised margins for the Comex silver trade at settlecontracts, which allow traders to lock in the day's settlement price fortheir purchases or sales.
Additionally, the exchange raised initial and maintenance margins forComex Miny silver futures and the E-Mini silver futures contracts.
Thursday's increase follows a similar margin increase Monday, andcomes during the astonishing volatility in silver prices. Silver postedanother huge price swing Thursday, with the front-month contract rising3.4% to a record settlement of $47.520 a troy ounce. Investors have beenflocking to this relatively small market to take advantage of themetal's much lower price than that of gold, which is sky high.
-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; tatyana.shumsky@dowjones.com
--Matt Whittaker contributed to this story.