Investment Review №355. The Rally Isn't for Everyone
LONG PUT ON SLV
Trade Thesis
Buy the SLV 55 Put as a tactical bet on a further silver correction. SLV is trading below its 200-day moving average, while the IV/HV ratio is around 0.88: implied volatility has declined, but realized volatility remains stable. This makes the long put relatively inexpensive while downside risk remains elevated.
Key Arguments
- SLV is below its 200-day moving average, signaling a weaker medium-term technical trend.
- IV/HV is near 0.88, with the decline driven mainly by lower IV. A renewed selloff could benefit the position through both delta and a rebound in implied volatility.
- High interest rates and a firm U.S. dollar remain headwinds for precious metals, while industrial silver demand faces pressure from thrifting and substitution in solar applications.
Risk Management
Trade parameters
