Silver’s insane run in 2025 and early 2026 is finally showing some cracks, and strategists are starting to treat this less like a momentum ride… and more like a setup for a nasty reversal.
The move has been so extreme that even small shifts in fundamentals or positioning could trigger outsized downside.
Why the silver trade is starting to look fragile
The core bull case has been built on tight physical supply, strong momentum, and “silver = leveraged gold.”
But strategists are now flagging that parts of that thesis are weakening, which is dangerous when price has already gone parabolic.
Michael Purves: hedge longs using an SLV options collar
Michael Purves (Tallbacken Capital), who’s been bullish silver, thinks it’s time to hedge again.
His recommended trade:
Sell SLV $95 calls expiring in February
Use that premium to buy SLV $75 puts expiring in February
The logic: the put-call skew is distorted enough that you can essentially buy downside protection without paying much out of pocket by financing it with upside calls.
Purves also highlighted something important: speculative long futures positioning is at 20-month lows and open interest is at five-year lows, which is surprising given the size of the rally.
Macro Hive: the physical market tightness is reversing
Macro Hive strategist Viresh Kanabar pointed to a major structural change:
1-month forwards on physical silver flipped back into contango.
That’s a big deal because contango tends to signal easing tightness in the physical market (the opposite of what silver bulls have been leaning on).
He said this lines up with:
physical ETF outflows
evidence high prices are hurting industrial demand
His conclusion was blunt: they are not bullish on silver at these levels, and downside risks are rising.
Pinebrook: positioned short via SLV puts
David Cervantes (Pinebrook Capital) said he’s already taken a bearish position through put options on SLV with ~3 months to expiry.
His reasoning: silver’s outperformance vs the stock market over the last 100 and 252 days has hit levels he sees as unprecedented.
He also made it clear this is a speculative trade, not some high-conviction portfolio bet.
Bottom line
Silver can stay irrational longer than people think, but the risk profile is shifting.
When the physical tightness story starts to fade and the chart is stretched, silver doesn’t usually “cool off.”
It snaps.