However, in today’s volatile market, picking the right time to buy silver is something of a guessing game.
But if you are familiar with options, you can let them be your guide in learning precisely when to buy.
And here’s the best part: This option trading strategy will only cost you a few dollars.
It works with either options on silver futures – e.g., the standard 5,000-ounce Comex contract, recently valued at around $140,000 – or any of the much more affordable silver-based exchange-traded funds (ETFs) on which options trade.
Taking the Guesswork Out of Silver Prices
For ease of explanation, I’ll base our example on the iShares Silver Trust ETF (NYSEArca: SLV), recently priced at $27.34. For comparison purposes, the price of a single SLV share typically tracks the price of one ounce of silver, but is usually 75 to 80 cents lower.
Here’s what you do: