What Should We Do With Our Silver Volatility Spread?

Back in December, I suggested a strategy for addressing silver’s epic bull market (and resulting correction risk) that involved betting on action, not direction. From that post:

Enter the Volatility Spread

There’s a simple options strategy for times like this. It’s called a volatility spread, and involves buying mirror-image calls and puts for a given security.

The goal is for the security’s price to either spike or plunge, giving the winning option a gain large enough to offset the loss on the losing option. Put another way, you’re betting against consolidation, where the asset just sits there. Put yet another way, you’re long action and short boredom.

To illustrate the point (and get in on the fun), I just bought “at the money” September puts and calls on SLV, the ETF that tracks the silver price. Here’s how they show up in my account:

SLV 09/30/2026 63.50 C
SLV 09/30/2026 63.50 P

The premiums for each option were around $10, so silver must make a serious near-term move for this spread to deliver a substantial payoff. But it’s an extreme time for the metal, so it’s possible that we’ll see at least a modest profit (and maybe some excitement) in the year ahead.

So far, so good

Silver, as we all know, has rocketed beyond December’s $63 level:

The volatility spread’s call option, as a result, is up way more than its put option is down, giving the spread an approximately 30% gain. Not spectacular, but positive, and definitely fun to watch.

What should we do now? There are three possibilities:

• Cash out today for a modest profit

• Let it ride, since the options don’t expire until September, and a lot of people are predicting triple-digit silver in 2026

• Close this spread out and create a new one with today’s even more extreme volatility

I’m going to choose the first to have a closed trade to report in the next Monthly Portfolio Update. But each of these choices is defensible.

Let’s see how it goes. And in the meantime, keep stacking.