Puts on Silver (SLV)

I don’t often short the precious metals other than for hedging purposes, but this time I am taking a kick at the can and buying puts against SLV, just because I think it stands a good chance of going down.  Why should the flashy traders have all the fun?  I can lose money just as well as them and maybe even make some.  Either way, at least with options you know what your total loss will be.

A caveat by the way is that although we noted caution on precious metals and reduced risk in the stock market in an NFTRH update yesterday, the usual gold bug suspects seem to be bearish right now.  So that puts me in the contrarian indicator category with them, which I don’t like.  Also, the stock market has not yet proven its reversal from the thus far mini-correction.  It generally remains locked below its short-term moving averages.  So risk has not quite yet gone back ‘on’.

Anyway, as also noted in the update yesterday, I don’t like the miner under-performance and I am not too wild about the nominal look of SLV either, as it gapped up to the SMA 200 but is below the February high.  The puts are near the money, so I am not looking for a crash to the extent of the last downturn… although that would be good too because it would clean out the gold (and silver) “community” for future investment purposes.  Note:  I have a forever position in gold, which makes me better able (mentally) to short the metals on occasion.


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