Trade Alert: After Gold

A bullish options trade on a much less liquid precious metal that could go parabolic.

Why We’re Swinging Big Today

Same philosophy: uncapped upside with defined risk so we can swing for the fences.

Precious-metals tail risk, on purpose

A sharp rally in gold and silver has us looking one step further down the liquidity ladder. As our friend David Janello, PhD, CFA argues, when capital chases the shiny stuff, it can spill into a far less liquid precious metal—and if/when it does, the move can be violent.

The Most Violent Move You Will Ever See In Your LIfetime

That asymmetric backdrop is exactly why we’re using an uncapped call leg financed by a small put floor: keep the downside bounded, leave the top open (We’re using a different instrument and approach than Dr. Janello here, one more suitable for smaller accounts and less active traders).

Why now

• Macro bid under the metals complex; breadth widening.

• If attention rotates into the thinner market, price can gap in chunks, not steps.

• Our structure harvests near-term IV while keeping the long tail alive.

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Playbook:

• Uncapped calls for the tail.

• Tight, defined put floor to finance and cap risk.

• Pre-wired exits orders so we don’t have to babysit the trades. I’ve made a slight adjustment to our exit approach on the calls, one which should help us capture more upside should the underlying names here go parabolic.

Full details below.

Today’s Precious Metals Trade