Silver is not a stranger to parabolic bull markets. It spiked roughly 100% when the U.S. government abandoned pegging the price of silver certificates in the 1960s. It spiked by more than 400% before falling by more than 40% mid-decade in the 1970s, as inflation rose following Nixon’s unilateral abandonment of the gold standard in 1971. The sharpest bull market to that point occurred during the late 1970s, rising to nearly $50/oz from less than $4 as brothers Nelson and William Hunt attempted to corner the market before being foiled by regulatory changes and massive margin calls that ultimately led them to file for bankruptcy. From the Hunt Brothers’ peak to the lows in the early 1990s, silver fell more than 90% to less than $4/oz. The last day Silver traded below $4 was September 14th, 1993, but by late 2001, it had undergone another bear market and traded as low as $4.06/oz. Silver would not touch the Hunt Brothers’ January 1980 high until more than 31 years later, in April of 2011, when it briefly breached $48 before falling into yet another bear market. It finally decisively broke above the Hunt Brothers’ high last October. Silver rose above $50 for the first time in November, and since then it has more than doubled once again, closing last Friday just shy of $103.20 per ounce. Silver has now appreciated nearly 480% So it’s clear that silver has experienced some wild markets over the past 60+ years, but how can one get some context for this most recent rally to establish whether silver could double again, a move that would be comparable to the Hunt Brothers’ era, or suffer a pullback? A Hunt-style “corner” recurring, where a concentrated actor (or actors) corners deliverable supply through leveraging the way the Hunts did, is unlikely. The combination of position limits and market surveillance, along with the demonstrated willingness to use margin/rule changes, would make it extremely difficult, and what happened to them (bankruptcy) might make any attempt unappealing, even if a possible mechanism were identified. A Hunt-scale price outcome in real terms (≈$200/oz+) via a modern-style squeeze/overshoot is, of course, possible, but it’s not likely. Consider that the only time in history when a move of that magnitude occurred, there was deliberate, aggressive market manipulation. You’d likely need a stack of conditions: ongoing physical tightness, sustained ETF/retail inflows, constrained inventories, plus a macro catalyst that keeps marginal buyers engaged long enough to overwhelm profit-taking—and all of that without margins/rules choking off leverage. Those wondering aloud whether this can continue much longer – this article included – could themselves send a few traders and investors to the exits. For your contemplation, consider the following charts. The first (below) is gold /silver – right now an ounce of gold costs roughly 48 ounces of silver (marked by the gold colored arrow). This is not as expensive as silver has been relative to gold in the past half century, but it’s well below the ~64 ounce average. A histogram provides another way to look at it – I’ve colored the “where you are now” bar, dark(er) blue… A long-term price chart is quite disconcerting. If you’re long silver or a proxy for it, such as the ETF SLV , it may be tempting to “let your winners run”. That’s generally good counsel, and there were many situations in this most recent rally where it might have been tempting to sell, but it proved wiser not to. As a counterpoint, I would offer the following: What if protecting your position would give you more upside opportunity relative to the downside risk? Options on commodities often exhibit “positive skew”, that is, upside calls trade at a higher implied volatility (the way options traders think about price) than downside puts do. A trader could buy a downside put on SLV that is less than 10% out of the money, financed by selling an upside call that is more than 18% out of the money. As follows, buying the March 31st $90 strike put and selling the March $120 strike call. The collar will make money on declines below $90 while sacrificing any gains above $120 in SLV. When combined with a long position in silver, the resulting position would behave like an in-the-money call spread. No decay, but asymmetric upside participation relative to the downside risk (in this case I am again using March 31st expiration, long $90 strike calls and short the $120 strike calls) – notice that “at spot” (the current stock price) the option trade profit/loss graph is ~breakeven at expiration. DISCLOSURES: None. 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