🚨 ‘I Hired a Team to Kidnap Tom and Graham’ 🚨
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Every few months, the same concern shows up in my inbox…
What happens if everyone exercises their contracts? Won’t we run out of physical metal to deliver?
Let me put this one to rest once and for all.
About 99.9% of all paper contracts are never exercised. Period. That’s not an exaggeration — that’s how the market actually works.
The only real exceptions are in the broader agricultural and livestock sectors, where physical delivery is tied directly to real-world production and processing.
Where Contracts Actually Get Exercised
Traditional agricultural markets are basically the only places where you see commercial physical delivery playing a regular, foundational role, and there’s a simple reason for that.
Companies like General Mills (GIS) and Post Holdings (POST) need grains to make their products so they try to lock in a specific price.
That’s the purpose of those contracts — not speculation but securing inputs ahead of time. Even then, most of the real action happens outside the exchange. These large food companies often go straight to farmers and arrange to purchase crops like corn, wheat or sorghum directly from the farm.
Drive through farm country and you’ll see entire fields contracted this way. The farmer gets guaranteed buyers and the company gets price certainty long before anything trades hands.
That’s how the system is designed to work. But in most markets, especially metals, traders aren’t interested in delivery at all.
What’s Really Moving the Market
Most moves in the market anymore are done by bots or AI. A lot of people just let algorithms trade for them these days. It’s in and out and in and out and in and out. So when you see all that open interest, it’s not because someone wants to take delivery.
Take SPDR Gold Shares (GLD) as an example. One share of GLD is roughly 0.0903 of an ounce of gold. Even if you’ve got a couple hundred shares, you’re talking about maybe half an ounce. Nobody’s lining up to redeem that.
Even in the grain markets — the ones that actually exercise contracts — if every open contract were exercised, there wouldn’t be enough physical product to fill them. It’s simply not how the system works.
And yet decade after decade, the same fear comes around: “If all these contracts are exercised, we don’t have enough metal to cover it.”
Technically true, but practically irrelevant.
Nobody ever exercises that much, and they won’t — not now, not later. So if you’ve been losing sleep over contract delivery shortages, you can stop.
This isn’t a real risk in the paper markets — it’s just noise designed to get you worried about something that isn’t going to happen.
Trade your plan, watch your levels and don’t let the fear-mongers talk you into hedging against a phantom problem.
Geof Smith
Geof Smith Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
#ALERT: Tom & Graham Can Still Be Saved…
We Need Your Help To Free Them, Watch Below:
Project Atlas is finally complete…
But Graham Lindman and Tom Busby are still being held.
Emily says there’s only one way they’ll be released, and it all depends on whether enough people are willing to step forward before time runs out…
▶ Watch the final transmission to learn how you can help free Tom and Graham
