It feels like just a moment ago I was discussing the iShares Silver Trust ETF (SLV) and its impressive price surge. That was a mere ten days ago, but clearly, it’s time for another update along with some new strategies. This is actually a tactic I used during the hectic holiday season when SLV saw significant rises.
On Monday, silver prices and SLV dropped sharply before bouncing back. Again, we see that today’s markets are heavily influenced by algorithmic trading and retail investors, which have turned what used to take months into fluctuations happening in just a few days.
Looking back, it’s clear that silver has had quite a remarkable year, or, well, I might say “golden”—though that could be misleading. Even after a pullback of 9% to 10% on Monday, SLV is still up over 140% as we approach the end of 2025.
This year, the stock has set new highs 66 times, averaging one every four days throughout the entire year. That’s definitely a positive trend!
I often refer to the price trend for SLV as resembling the “Empire State Building.” It rises so sharply that it brings to mind that iconic skyscraper. The significant price doubling since August has made that ascent possible.
As we consider the current chart, which I call “stretched,” it’s worth noting that this kind of rapid growth is generally uncharted territory. SLV is currently sitting about 50% above its all-time high from 2011.
SLV’s Price Pattern Reminiscent of the Empire State Building
So is this just a fluke, or is there more complexity to those peaks? The data from Monday shows numerous moving average crosses. That should at least be acknowledged. But the flip side is that both algorithms and retail investors don’t seem to hold as much respect for historical patterns these days, which is part of why SLV has experienced its recent behavior.
I’m more interested in exploring potential outcomes rather than making predictions. Thus, when I look at the monthly chart including that 2011 high, it feels like SLV is at a pivotal point—one that could go in either direction.
This isn’t about enforcing rules; more about managing risk while trying to hold on to SLV. In my previous article, I mentioned a potential collar strategy. The upper limit is set at $76, and the lower at $60, with the collar expiring on March 20, 2026.
As of noon on December 29, 2025, this collar still has close to three months to go, so it’s fairly slow-acting, even if SLV doesn’t move much at all. SLV was around $65 then, so we’re nearing that $60 put strike but quite a distance from the $76 call strike.
A put option bought at $5.40 is now valued at $4.20, losing worth as SLV rallied last week. Meanwhile, eligible calls now cost $3.70, up from $1.99 just ten days back. This scenario has decreased the risk of being called out at $76 by March, although the rise in volatility has created an unrealized loss.
Conclusions
I think this presents a fascinating case study—not specific, but it illustrates why traders might first consider collars. If you’ve owned SLV over the past ten days, you might have alleviated some of the fears that it could plummet, potentially below $50. For the next twelve weeks or so, collar owners can relax a bit and see if they can manage to profit nicely.
If SLV indeed drops to $50, those puts would be worth at least $10 each. That’s not a bad cushion. Plus, the $1.99 per share generated by the covered call will remain intact. And of course, you can always adjust the collar for some flexibility.
For those holding SLV, it might be wise to wait and see. If you don’t have SLV in your portfolio, the current volatility presents an interesting return/risk scenario.
In this collar example, you could filter through data on Barchart.com to assess competitive conditions. Compared to a firm downside limit of $65, a similar upside could be set for a shorter timeframe.
As always, collars do involve risks. It’s just a part of the investing journey, right?
