Just looking at the weekly market heatmap from Predata and seeing that Silver is number one on the Global Markets Scoreboard, apparently reduced supply chat on Russian Webpages causing the spike in web traffic and powering it to number one this week. Silver does seem to have been holding up well here, so maybe the thread has some legs.
On the back of this, we did some digging on our Backtesting function in the Metals space to see if we find a zero cost way to play a potential Silver move upward. Silver options vs Copper options came out as the best potential performance. Silver Vol has recently dipped beneath Copper recently providing some clues.
If you create a Vega weighed 30 delta Call structure, and plot that, you can get an idea of how the Silver & Copper 30 Delta Calls have interplayed over time. It’s not at its cheapest (i.e an RV play) but as a pure bull Silver play looks ok at zero cost & small negative Z-Score.
The real test is backtesting the structure to see how it’s delivered over time. Here we can see that it’s delivered 0.225 ticks over 10-Years, vs its 0.00 current price.
Trade added to our tracking, weighted for trading (1/1,2).
