SLV: Protect Your Downside Like I Am, With A Collar

Sungarden Investment Publishing
Investing Group Leader
(10min)

Summary

  • I'm not a silver bull, but current technicals show a compelling breakout, making this a trade setup rather than a long-term investment.
  • I'm using the iShares Silver Trust ETF for liquidity and options availability, with a tactical position initiated around $33.50.
  • To manage risk, I employ an options collar strategy, capping both downside and upside, aiming for a favorable risk/reward profile.
  • My approach is technical, not fundamental. If silver reverses, my collar limits losses, but if the rally continues, I'll adjust the trade accordingly, being prepared to roll up and out.
  • This idea was discussed in more depth with members of my private investing community, Sungarden Investors Club. Learn More »
Pit Bull Portrait

mtnangel/iStock via Getty Images

Co-Authored by Jack Bowman

Silver is not one of my favorite investments, historically. I know that some people can wax poetic about the virtues of this commodity, so please spare me. Whether it's related to its high-correlation cousin, gold, or lauding the industrial uses of silver

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This article was written by

Sungarden Investment Publishing
7.87K Followers
I'm Rob Isbitts, founder of Sungarden Investment Publishing. I run the new investing group Sungarden Investors Club, a community dedicated to navigating the modern investment climate with humility, discipline, and a non-traditional approach to income investing. I've been charting investments since the 1980s, and I spent decades an an investment advisor and fund manager before semi-retiring in 2020. Now, this investing group is my focus. The markets tells us a story…we just have to listen! I teach subscribers how to do that.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of SLV either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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