Taking Profits On Silver

Not calling a top, but following our process.

Taking Profits On Silver

Silver has been on a tear. Since early December, the metal has nearly doubled, squeezing shorts, ripping through technical levels, and catching the market badly offsides. Today, we locked in partial profits on one of our silver plays—not because we think a correction is imminent, but because this is how disciplined options traders stay solvent: take gains when they’re handed to you, and keep upside optionality alive.

Earlier today, we sold half of our Silvercorp Metals (SVM -6.82%↓) calls for $6.90, after buying them in December for $2.04. That’s a 238% gain—booked, banked, and real. The other half of the calls are still riding. Thanks to the structure of this trade, though, our actual return on those calls today was even higher—360%—as you’ll see below.

But to understand why we took profits today, it helps to understand why we entered the silver trade in the first place.

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Why We Bet on Silver in December

Back on December 10, silver was quietly setting up for a move that most investors weren’t paying attention to. The gold–silver ratio was stretched to extremes again, and history tells us something simple:

• Either gold drops,

• Or silver plays catch-up—and usually very fast.

Given the macro backdrop, we believed the catch-up scenario was far more likely. We didn’t need silver to become a mania; we just needed it to revert to something closer to normal.

To express that view, we chose Silvercorp Metals (SVM -6.82%↓) as our underlying.

Why?

• It screens well fundamentally: profitable, cash-generating, low-cost operations.

• It gives you more torque than the metal itself (miners tend to move 2–3× relative to the underlying commodity).

• It wasn’t bloated or overhyped—perfect for a mean-reversion setup.

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Why We Used Options Instead of Shares

Buying the stock would’ve been a valid play, but long-dated calls gave us something better:

Asymmetric payoff.

If silver did nothing, our risk was capped. If silver ripped, the calls would amplify the move. And if the gold–silver ratio normalized sharply, the upside could be exponential.

We structured the trade using a simple layout:

1. Buy the July 2026 $7.50 calls (paying $2.04 per contract)

2. Sell the April 2026 $7.50 puts (collecting $0.83 per contract)

3. Buy the April 2026 $5.00 puts (paying $0.14 per contract)

For a net cost of $1.35 per contract.

That second and third leg—the put spread—weren’t just there for show. When we opened the trade, the put spread brought in a net credit of $0.69. Last week, we exited that spread for a net debit of $0.15, leaving us with $0.54 of net premium to help finance the calls.

So while the calls showed a sticker price of $2.04, our effective net cost was $1.50 per contract (our initial cost of $1.35 per contract + the $0.15 we paid to close out the put spread). Selling half at $6.90 turns that into a 360% gain on the first half of the calls.

This layout lowered the cost of the long calls while defining our downside. In other words:

• Cheaper to enter

• Unlimited upside

• No blow-up risk on the downside

This is the kind of structure that lets you swing hard and sleep at night.

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How We Pre-Set Our Exit Triggers

We don’t wake up each day and guess whether to hold or sell. The process is simple:

• When a call position roughly triples, scale out of half.

• Let the remaining half run, ideally into a parabolic move.

• Avoid “all-or-nothing” decisions that destroy P&L over time.

Today’s partial exit wasn’t about calling a top in silver. It was just our process firing exactly when it should.

Those SVM calls we effectively paid $1.50 for hit $6.90, giving us a >200% gain on half of the calls even using the more conservative $2.04 sticker price. On a true net-cost basis, the return is 360%. Now that we’ve taken our initial risk off the table and booked real profits, the remaining calls are effectively a free swing with upside.

That’s where big winners come from—not prediction, but positioning.

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Where We Go From Here

We’re not calling a top in silver. We’re not calling anything.
We’re following the math, the process, and the structure that works:

• Harvest gains when they’re big

• Keep upward exposure intact

• Let the second half chase the melt-up if it comes

If silver keeps running, we’ll enjoy the ride.
If it doesn’t, we’ve already locked in triple-digit profits.

That’s how you survive long enough in this game to compound.