I've been stacking since 2013. I like the risk vs reward of just holding the metal. That is exciting enough for me, and if it falls back in to the 20s, I'm still holding.
Agree with Stanley. I can read the chart but believe silver not overbought. Look at Golds recent history...RSI was flashing red from 3526 to 4425 before it had a modest retracement. Expect the same from Silver...new paradigm. That said, watching the chart like a hawk. Another great report, John!
I doubt that silver is over bought. More likely IMO is that it is still significantly undervalued. For instance look at US and world finance, look at mountains of debt everywhere you look. Look at the fact that no one in government could care less about the buck. True, there has been serious expansion of money to the point of recklessness with no major consequences. That was in the gradually part and the government and the economy is hooked on more. We are the social/financial equivalent of Kensington Ave. And world wide everyone almost everyone is looking for alternatives to fiat. Industrial demand is improving. Trump is demanding more printing and easier terms. There may be occasional selloffs but I would not bet any money on anything serious or lasting. Recently, Ross Beatty (Equinox) advised against selling this bull move and I believe that he is a very good person to listen to. I can see silver at 300 to 400 per ounce before much of a selloff and even then I don't think it will be anything like a bear market. Silver is a very valuable mineral with much demand. Look at what bitcoin did selling a bunch of hot air at astonishing prices. lol
Risk to reward on this is really bad. Buying volatility is very seldom a good Idea. The time value on this is likely to eat your lunch even though it is out so far. I've been trading options since 1992. Break even at 42.95 and 83.03 . Collapse in volatility and this would die in a hurry. The best you can say for this straddle is you won't lose very much for a while. And next time you'll know better.
I agree. Some sort of exit strategy should be in place now.
An adage that makes sense to me is that it is better to miss out on gains than to lose capital. That means one could just sell out now and enjoy your gains and see what happens on the sidelines. You may miss out on further gains, but you won't lose what you've gained already.
But it's very possible that there really won't be that much of a correction (in silver, especially). A number of traders have said that the last few years - and especially 2025 - have been years in which all of the old trading rules haven't applied. Basically, that trades based on technicals have been punished almost every time. "Overboughtness" may be technically true, but things have been that way for a while, and the basis for that metric is based on historical patterns. In the case of silver, it's price isn't even close to it's "true" inflation-adjusted price (in dollars). In other words, silver at $50 in 1980 is equivalent to about $196 today, so in real terms silver isn't even close to the all-time high.
Timing can work both ways. Almost every time I've sold out of positions to try to buy back in at lower prices have failed. Corrections have just been too shallow and too short-lived. It's possible that in retrospect the levels we're looking at right now are going to look tiny, and probably much sooner than you might think possible.
Nevertheless, it's only prudent to guard against massive (albeit "paper") loses form a major correction. One thing I like about JR's strategy is you never really lose your position; it's just protected.
Good call John. For even more "thrills and chills" buy the long options on AGQ. Maybe 4 - 5% of the total portfolio. Otw - MERRY CHRISTMAS AND HAPPY STACKING!
PS - Remember - Constitutional Money is 15/1 and if the Gold in Fort Knox is actually there (highly dubious I know) then a "price" of @$35,000 "covers" @45% of M2 and could "recapitalize" the financial system.
That makes sense. I wasn’t sure if there was a percentage of the options vs your stack value that made sense with a strategy like this. I’m going to just dabble on these
"Long action short boredom." Classic!
I've been stacking since 2013. I like the risk vs reward of just holding the metal. That is exciting enough for me, and if it falls back in to the 20s, I'm still holding.
John,
Thank you for the play, I'll give it a try and X my fingers with you.
Steve
Agree with Stanley. I can read the chart but believe silver not overbought. Look at Golds recent history...RSI was flashing red from 3526 to 4425 before it had a modest retracement. Expect the same from Silver...new paradigm. That said, watching the chart like a hawk. Another great report, John!
I doubt that silver is over bought. More likely IMO is that it is still significantly undervalued. For instance look at US and world finance, look at mountains of debt everywhere you look. Look at the fact that no one in government could care less about the buck. True, there has been serious expansion of money to the point of recklessness with no major consequences. That was in the gradually part and the government and the economy is hooked on more. We are the social/financial equivalent of Kensington Ave. And world wide everyone almost everyone is looking for alternatives to fiat. Industrial demand is improving. Trump is demanding more printing and easier terms. There may be occasional selloffs but I would not bet any money on anything serious or lasting. Recently, Ross Beatty (Equinox) advised against selling this bull move and I believe that he is a very good person to listen to. I can see silver at 300 to 400 per ounce before much of a selloff and even then I don't think it will be anything like a bear market. Silver is a very valuable mineral with much demand. Look at what bitcoin did selling a bunch of hot air at astonishing prices. lol
Risk to reward on this is really bad. Buying volatility is very seldom a good Idea. The time value on this is likely to eat your lunch even though it is out so far. I've been trading options since 1992. Break even at 42.95 and 83.03 . Collapse in volatility and this would die in a hurry. The best you can say for this straddle is you won't lose very much for a while. And next time you'll know better.
Cliff K
Good one today, John. Linking as usual @https://nothingnewunderthesun2016.com/
I agree. Some sort of exit strategy should be in place now.
An adage that makes sense to me is that it is better to miss out on gains than to lose capital. That means one could just sell out now and enjoy your gains and see what happens on the sidelines. You may miss out on further gains, but you won't lose what you've gained already.
But it's very possible that there really won't be that much of a correction (in silver, especially). A number of traders have said that the last few years - and especially 2025 - have been years in which all of the old trading rules haven't applied. Basically, that trades based on technicals have been punished almost every time. "Overboughtness" may be technically true, but things have been that way for a while, and the basis for that metric is based on historical patterns. In the case of silver, it's price isn't even close to it's "true" inflation-adjusted price (in dollars). In other words, silver at $50 in 1980 is equivalent to about $196 today, so in real terms silver isn't even close to the all-time high.
Timing can work both ways. Almost every time I've sold out of positions to try to buy back in at lower prices have failed. Corrections have just been too shallow and too short-lived. It's possible that in retrospect the levels we're looking at right now are going to look tiny, and probably much sooner than you might think possible.
Nevertheless, it's only prudent to guard against massive (albeit "paper") loses form a major correction. One thing I like about JR's strategy is you never really lose your position; it's just protected.
Good call John. For even more "thrills and chills" buy the long options on AGQ. Maybe 4 - 5% of the total portfolio. Otw - MERRY CHRISTMAS AND HAPPY STACKING!
PS - Remember - Constitutional Money is 15/1 and if the Gold in Fort Knox is actually there (highly dubious I know) then a "price" of @$35,000 "covers" @45% of M2 and could "recapitalize" the financial system.
GOOD TO HEAR!
Love this idea John. What would you recommend as far as contract sizing to make this a bet worth it? In terms of a percentages (rough ones)
Hi Josh, options should always be a very small part of a portfolio. Think of them as insurance or leverage, at the margin.
That makes sense. I wasn’t sure if there was a percentage of the options vs your stack value that made sense with a strategy like this. I’m going to just dabble on these