On the other hand, silver might get burned even worse tomorrow. (Though right now in Hong Kong it's selling at 27.40, 50 cents up from NY close.)

http://blogs.wsj.com/marketbeat/2010/11/09/precious-metals-watch-can-you-say-margin-calls/

The silver juggernaut has finally met some resistance.

On Tuesday, silver prices soared $1.474 to $28.90 per ounce. After the market settled, CME Group, where the metal is traded, decided to raise the margin requirements for holding a silver futures contract from $5,000 to $6,500 per contract.

Exchanges typically raise margin requirements when prices are too volatile to be covered by the collateral traders have pledged. For example, Tuesday’s silver move can be translated into a $7,370 per contract move, as each silver contract has 5,000 ounces, well exceeding the original margin.

Higher margin requirements mean that investors need to put up more money to trade and hold a contract. For silver, it’s a combination of higher prices and more volatility that has led to the exchange’s action, said Richard Digenan, assistant margin manager at R.J. O’Brien. This has been the first margin increase since April. This year, silver is up 71%.

The margin action has probably triggered a selloff in precious metals in late Tuesday. Silver, measured by the most active contract, settled up 5.4%, but fell 7.3% to $26.805 per ounce after hours. Gold was up 0.5% at settlement, but fell 1.5% to $1,388.8 per ounce after the CME announcement.

As the new margins won’t become effective tonight, Mr. Digenan said he might start making some “margin calls” to clients tomorrow morning.