Trade Alert: Silver Slingshot

A triple-levered bet on the gold-silver ratio reverting toward its mean. Plus, another biotech binary bet.

The Silver “Slingshot” Trade

The Macro View: Why Silver, Why Now?

For the last 18 months, the Gold-Silver Ratio (GSR) has tested the patience of every precious metals bull. While gold spent late 2024 and early 2025 shattering records, silver—which is half monetary metal, half industrial commodity—initially lagged behind.

But that dynamic has officially shifted. With silver recently breaking $60/oz and the GSR compressing toward 70, we are entering the most explosive phase of the cycle: “mean reversion.” Historically, during full-blown precious metals bull markets, this ratio doesn’t just stop here; it compresses toward 50:1 or even 40:1.

Mathematically, there are only two ways that happens:

1. Gold crashes while silver stays flat (unlikely in this macro environment).

2. Silver slingshots higher to catch up to gold.

The “Triple Leverage” Kicker

This trade is designed to stack leverage in our favor three times over:

• The Metal: Silver acts as a leveraged play on gold during ratio compressions.

• The Miner: Mining stocks typically move 2x–3x faster than the metal due to operating leverage (fixed costs vs. rising revenue).

• The Options: By using a bullish options structure instead of buying shares, we magnify that move even further, aiming for outsized returns if the “slingshot” thesis plays out.

The “7777” Screen

We aren’t just buying any miner. We ran our “7777” screen on Chartmill, which looks for stocks with a rating of 7/10 or higher in four key fundamental categories:

• Profitability: They must actually make money (rare for junior miners).

• Valuation: They can’t be priced for perfection.

• Growth: Earnings and revenue must be expanding.

• Health: Balance sheets must be robust enough to survive volatility.

Only 11 stocks in the entire database hit these criteria today. One of them is a silver miner breaking out to 52-week highs, and that’s our trade for today.

One more thing...

While silver is our main macro focus today, we are also looking at a special situation in the biotech sector. We normally describe the trade rationale in the free section, but in this case, we are briefly alluding to a “Biotech M&A Lotto” here and spelling out the full details in the paid section. This is a high-risk, binary event trade involving a potential buyout of a French biotech firm, but if we’re right, it could lead to a 100%+ gain within the next 6 weeks.

Details below.

---

🔓

Today’s Chartmill 7777 Trade

(Silver Mean Reversion / High-Grade Miner)

The stock is Silvercorp Metals (SVM 0.00%↑), and our trade is a combo consisting of these three legs:

1. Buying the $7.50 strike call expiring on July 17, 2026,

2. Selling the $7.50 strike put expiring on April 17, 2026, and

3. Buying the $5.00 strike put expiring on April 17, 2026,

For a max net debit of $1.45. The max gain on 2 contracts is unlimited, the max loss is roughly $790, and the break-even is with SVM at roughly $8.17. This trade filled at $1.35.

---

The “Paris Plane Lotto” Thesis

We are taking a shot on Abivax (ABVX 0.00%↑).

The thesis here is entirely event-driven. We are looking for a buyout. The company has a promising drug pipeline (specifically Obefazimod for ulcerative colitis) that makes it an attractive target for big pharma looking to replenish their immunology portfolios.

Why “The Paris Plane Lotto”? Traders tracking corporate jet movements recently spotted an Eli Lilly (LLY 0.00%↑) plane landing in Paris—where Abivax is headquartered—sparking intense speculation that due diligence for a deal is underway.

Buyout rumors in this sector often lead to binary outcomes: either the deal happens and the stock skyrockets, or it doesn’t and the premium decays. Because of this, we are structuring this as a defined-risk combo.

Why January Expiration? We chose the January 2026 expiration specifically to capture the “Biotech Super Bowl”—the J.P. Morgan Healthcare Conference, which runs Jan 12–15. This event is historically the launchpad for major M&A announcements. Our expiration date of January 16th covers this event perfectly, giving us exposure to the highest-probability window for a deal announcement.

Today’s Market Watchers Trade

The stock again is Abivax (ABVX) and our trade is a combo expiring on January 16th, 2026, consisting of these four legs:

1. Buying the $140 strike call,

2. Selling the $160 strike call,

3. Selling the $95 strike put, and

4. Buying the $90 strike put,

For a max net debit of $5.60. The max gain on 1 contract is $1,440, the max loss is $1,060, and the break-even is with ABVX at $145.60. This trade hasn’t filled yet. This is a day order. If it doesn’t fill today, I’ll reevaluate after the close. This trade filled at $5.60 on 12/10/2025.

---

Exiting These Trades

My plan:

SVM

• Calls (Leg 1): Open a GTC limit order to sell half of the calls at $6.50. No later than 30 days prior to expiration, I’ll post an updated price target for the remaining call(s) in the comments here and via chat/email.

• Puts (Legs 2 & 3): Open a GTC limit order to exit at a net debit of $0.15, and raise that price, if necessary, as we approach expiration.

ABVX

• Call Spread (legs 1 & 2): Open a GTC Limit Sell Order at $11.30 to capture a standard volatility spike, lowering this price later if necessary as we approach expiration. If an acquisition at $160 or higher is announced outside market hours, we can adjust our exit price up to $19 before the market opens, to attempt to capture more of the upside.

• Put Spread (legs 3 & 4): Open a GTC limit order to exit at a net debit of $0.10, and raise that price, if necessary, as we approach expiration.