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Old 05-07-2012, 08:29 AM   #1
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Question Spread between bid and ask spot prices

Is it my imagination, or have they changed? I seem to recall the spread consistently running $0.10 for silver. The SilverSeek graph on the home page is showing a current spread of $0.055. Anyone know where one can find some historical data on the bid/ask spread?
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Old 05-07-2012, 08:32 AM   #2
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Just checked netdania and it looks like the current spread (as of the moment I post this) is closer to $0.03!
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Old 05-07-2012, 09:20 AM   #3
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I have also noticed the spread between buy back price and sale price for silver on apmex.com has dropped.
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Old 05-07-2012, 09:59 AM   #4
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Originally Posted by PMBug View Post:
Is it my imagination, or have they changed? I seem to recall the spread consistently running $0.10 for silver. The SilverSeek graph on the home page is showing a current spread of $0.055. Anyone know where one can find some historical data on the bid/ask spread?
PMBug - I assume you're talking about futures. Any idea of the size on the bid and offer? It's one thing to be 5 cents wide 1 lot up and a different thing to be 5 cents wide 1000 up.
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Old 05-07-2012, 09:59 AM   #5
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Originally Posted by benjamen View Post:
I have also noticed the spread between buy back price and sale price for silver on apmex.com has dropped.
Hmm... I haven't been tracking their buy back prices, but I know their premiums have not been dropping (actually went up a bit lately), that would mean the buy back prices have been rising?

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Old 05-07-2012, 10:00 AM   #6
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Originally Posted by jd1123 View Post:
PMBug - I assume you're talking about futures. Any idea of the size on the bid and offer? It's one thing to be 5 cents wide 1 lot up and a different thing to be 5 cents wide 1000 up.
No idea on the size. Just watching the bid and ask prices as reported by the simple tools mentioned.
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Old 05-07-2012, 05:04 PM   #7
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Originally Posted by PMBug View Post:
No idea on the size. Just watching the bid and ask prices as reported by the simple tools mentioned.
Got ya. Interesting observation. Many possible explanations, might even just be a one-off event. I've noticed from my trading experience that when a market gets a lot of interest, bid/offers tend to tighten as interest tries to squeeze market makers, and competing market makers try to win the trade. With computers running the show in futures, who knows. Or might be a bigger structural thing going on.
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Old 05-07-2012, 05:06 PM   #8
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Originally Posted by PMBug View Post:
Hmm... I haven't been tracking their buy back prices, but I know their premiums have not been dropping (actually went up a bit lately), that would mean the buy back prices have been rising?

PMBug - what's the deal with this? Why do premiums tend to expand/contract? Can't really figure this out besides possibly a bad hedge by dealers. I mean, if it's profitable at $1 over spot, why suddenly increase it $0.50 when prices move?
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Old 05-07-2012, 06:34 PM   #9
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For retailers, the buy/sell spread has more to do with the split between the physical (wholesale) price for coins/bars versus the futures/spot price. Rising premiums for physical generally reflect scarcity / tightening of supply.
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Old 05-07-2012, 06:39 PM   #10
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Originally Posted by PMBug View Post:
For retailers, the buy/sell spread has more to do with the split between the physical (wholesale) price for coins/bars versus the futures/spot price. Rising premiums for physical generally reflect scarcity / tightening of supply.
Thanks, makes sense. Where do these guys get their inventory from? Places like NTR?
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