Silver Rises Over 120% YTD 
Is the COMEX about to default?
If you’ve been following silver headlines lately, you’ve probably seen the numbers:
- 400 million ounces of open interest
- Only 100 million ounces of registered silver
- “This isn’t speculation — it’s a math problem.”
On the surface, it sounds like a breaking point. Demand appears to exceed supply by a factor of four. If everyone stands for delivery, wouldn’t the exchange run out of silver?
Not so fast. Let’s separate fact from fiction.
The 400 Million vs. 100 Million Ounce Claim
The raw numbers being cited are real.
As of early February, the March silver contract showed roughly 400+ million ounces of open interest. Meanwhile, registered silver inventories hovered near 100 million ounces.
That’s the setup behind the “COMEX default” narrative.
The assumption goes like this: if even a modest percentage of contract holders stand for delivery — say 25% to 50% — the exchange won’t have enough registered metal to fulfill those obligations.
It sounds logical.
The problem? That logic misunderstands how open interest and delivery actually work.
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The “98% Delivery Rate” Problem
One of the loudest claims fueling default fears is that February saw a 98% delivery rate.
If nearly everyone stood for delivery in February, and March is much larger, then March must be a disaster waiting to happen… right?
Here’s the issue. That 98% figure is based on a denominator error.
Open interest is not a static stockpile. It’s a flow — contracts are constantly being opened, closed, rolled forward, or settled. Simply dividing total deliveries by one snapshot of open interest creates a distorted picture.
It’s like looking at water flowing through a bathtub and trying to calculate drainage by measuring only the water level at one moment in time.
To properly measure the percentage standing for delivery, you’d need to account for all delivery-eligible open interest across the full contract cycle — not just a single-day snapshot.
When you do that, the delivery percentage is nowhere near 98%.
Why February and March Aren’t Comparable
Another major flaw in the “March default” narrative is assuming February and March behave the same way. But the truth is, they typically don’t.
February is a minor delivery month. Participants who remain in the contract after first notice day are typically there because they actually want delivery.
March is different. March is a major month — the most active silver contract of the year. It includes hedge funds, banks, and traders who use futures for hedging and speculation, not necessarily for physical delivery.
Historically, major months see lower delivery percentages relative to open interest, even though participation is higher overall.
In other words, you cannot project February’s behavior onto March.
What a COMEX “Delivery” Actually Means
When delivery occurs on the COMEX, physical silver does not typically move. A “delivery” is a transfer of a warehouse receipt — essentially a warrant of ownership. The silver stays in the vault unless the new owner decides to withdraw it.
That same warrant can change hands multiple times without a single ounce leaving the warehouse.
So when you hear that “deliveries are surging,” it doesn’t mean silver is vanishing from COMEX vaults.
It means ownership is changing, not location.
What If the COMEX Did Default?
Alan’s honest assessment of a March default?
Approximately 0.001% — maybe 1 in 10,000.
And here’s the part most people don’t want to hear: You don’t actually want the COMEX to break.
If the COMEX exchange collapsed:
- Price discovery would freeze
- Liquidity would evaporate
- Regulations would likely tighten
- Windfall taxes or emergency measures could follow
Markets function best when they reprice gradually and fairly — not when they implode. The bullish silver case doesn’t require chaos. It requires repricing.
The Real Silver Thesis
The case for higher silver prices isn’t built on exchange collapse. It’s built on structural trends — supply constraints, industrial demand, monetary policy, and macroeconomic shifts.
If you’ve lost sight of that, it’s worth revisiting the bigger picture.
Before you base an investment decision on viral headlines or alarming charts, make sure you understand how the mechanics actually work.
Because in markets, misunderstanding structure is often more dangerous than volatility.
Watch the Full Breakdown
This summary only scratches the surface.
In the full video, Alan walks through the numbers step-by-step, explains the delivery mechanics in detail, and gives his candid view on the real probability of a COMEX default.
If you own silver — or are considering it — you should watch this before drawing conclusions.
Investing in Physical Metals Made Easy
People Also Ask
Is the COMEX going to default in March?
There is currently no strong evidence that the COMEX is at risk of defaulting in March. While open interest in silver contracts exceeds registered inventory, most futures contracts are settled or rolled over before delivery. Alan Hibbard explains the mechanics in detail in the full breakdown video on GoldSilver.
Does 400 million ounces of open interest mean there’s a silver shortage?
No. Open interest represents the total number of outstanding futures contracts, not the amount of silver demanding physical delivery. Historically, only a small percentage of contracts stand for delivery. Alan Hibbard explains the difference between open interest and actual delivery demand is explained in the full COMEX analysis on GoldSilver.
What does a “delivery” on the COMEX actually mean?
A COMEX delivery typically means the transfer of a warehouse receipt — not physical silver leaving the vault. The metal often stays in storage unless the new owner chooses to withdraw it. This distinction is critical when interpreting headlines about “surging deliveries.”
Why was the 98% silver delivery rate claim misleading?
The 98% figure was based on a denominator error — dividing total deliveries by a single snapshot of open interest. Open interest is dynamic and constantly changing, so that calculation overstates the true delivery percentage.
Would a COMEX default be good for silver prices?
Not necessarily. A COMEX breakdown could disrupt price discovery, reduce liquidity, and trigger regulatory intervention. Long-term silver investors typically benefit more from orderly repricing than from market chaos. For a deeper look at the broader silver thesis, watch the full video analysis on GoldSilver.
