Silver has been on a remarkable upward trajectory this year, more than doubling in price since January, consistently hitting new highs, and significantly outperforming gold.
Known as the “devil’s metal,” silver has surged roughly 119% year-to-date, with the latest spot price around $63.26 per ounce. During Friday’s session, it briefly touched a record high of $64.64.
How to Trade Silver?
In addition to trading the Silver futures $(SImain)$ and E-Mini Silver futures $(QImain)$, investors can gain exposure through silver-related equities such as Pan American Silver or via passive funds tracking the metal.
The iShares Silver Trust is the largest silver ETF on the U.S. market. Its substantial asset base and high liquidity make it a mainstream choice for investors seeking broad exposure to silver.
SLV Options Strategies
This guide outlines key options strategies for trading SLV (Silver ETF), organized by risk profile and market outlook.
Income Strategy (Conservative)
1. Sell Put
Sell short-term cash-secured put options to collect premiums.
If assigned, hold the shares and sell covered calls to earn additional premiums.
Repeat this cycle.
Logic:
Profit from market volatility through option premiums.
High implied volatility in precious metals increases premium income.
Applicable Markets:
High volatility, uncertain market direction.
Example:
Sell 1 SLV put option expiring this Friday, strike $55, collecting a $92 premium:
Initial Margin: $1,402 (est.)
If exercised, hold the shares and sell 1 call option expiring next week or the following Friday, strike $55.
Repeat the cycle.
Source: Tiger Trade App
2. Sell Covered Calls
Structure:
Hold 100 shares of SLV ETF.
Sell 1 call option expiring January 16, 2026, strike $58, receiving a $236 premium:
Advantages:
Enhances portfolio returns.
Best suited for neutral to moderately bullish markets.
Risks:
Potential assignment during sharp price spikes, limiting upside profit.
Bullish Strategy
Bull Call Spread
Structure:
Buy a call with a lower strike price.
Sell a call with a higher strike price (same expiration).
Example:
Buy $58 call, sell $60 call, expiring January 16, 2026
$SLV Vertical 260116 58.0C/60.0C$
Logic & Advantages:
Reduces cost (premium from sold call offsets purchase).
Offers higher returns in moderate upward trends.
Risk/Reward:
Maximum Loss = Net Premium = $59.5
Maximum profit if SLV expires above $60.
Source: Tiger Trade App
Bearish Strategy
1. Bear Put Spread
Structure:
Buy a put with a higher strike price.
Sell a put with a lower strike price (same expiration).
Example:
Buy $55 put, sell $50 put, expiring January 16, 2026
$SLV Vertical 260116 50.0P/55.0P$
Applicable Scenario:
Mildly bearish view; expecting limited downside.
Advantages:
Lower cost than buying naked puts.
More predictable risk/reward.
Disadvantages:
Returns are capped.
Preferred strategy when expecting only a moderate decline.
Source: Tiger Trade App
2. Bear Call Spread
Structure:
Sell a call with a lower strike price.
Buy a call with a higher strike price (same expiration).
Example:
Sell $60 call, buy $65 call, expiring January 16, 2026
$SLV Vertical 260116 60.0C/65.0C$
Applicable Scenario:
SLV consolidates at high levels or shows limited upside.
Advantages:
Caps maximum risk.
Profits from:
Time decay (theta)
Volatility decline (vega)
Cost-effective for bearish or range-bound markets.
Source: Tiger Trade App
Disclaimer: Options trading carries significant risk. Investors should make decisions based on their risk tolerance and financial situation.
