What a year for silver, the restless metal. It is now about to close the year down, after being up as much as about 100% in late April.
How many people where forecasting a drop in silver back when it was trading above $40?
SLV is trading at $26.50 as I'm writing this post.
As you can see on the SLV chart that I'm using as a proxy, the drop was nice but not as dramatic as the rise, which allowed for people to remain extremely bullish — including the crazy lunatics Eric Sprott and John Embry who bet the house on Silver...
As you know, I have been short silver since the $40 and nicely profited from the drop. In October, and closed my $42 and $40 puts on SLV and acquired a bunch of $30 puts on SLV.
With only 5-6 trading left on those puts, I have decided to close the position, with an extra gain of +86% although I expect the drop to continue over the next few months. A rally in silver should be expect at some point, given that the drop from about $35 to now close to $26 didn't see much resistance. I will use any such rally to enter a new short position.
Please note that all the options are on the table as I might use further weakness to bet on a short term gain as well.