ProShares Ultra Silver (AGQ), the leveraged exchange-traded fund seeking twice the daily performance of silver bullion, surged 5.03% during the after-hours trading session. This significant move follows a period of extreme volatility and a historic selloff in the underlying precious metal.
The sharp rise appears to be a technical recovery after silver prices experienced one of their most dramatic declines in decades. According to market analysts, the recent plunge was triggered by a confluence of factors including the nomination of Kevin Warsh as the next Federal Reserve Chair, which spooked markets and reversed the so-called "debasement trade" that had fueled precious metals' rally. Additionally, the CME Group's decision to raise margin requirements on gold and silver futures forced leveraged traders to liquidate positions, creating a vicious cycle of selling.
Market commentary suggests the selloff revealed acute liquidity stress, particularly in silver, which has a thinner market and more speculative positioning than gold. The leveraged nature of the AGQ ETF amplifies both downside and upside moves in silver prices, leading to the pronounced after-hours gain as some traders viewed the sharp decline as a potential buying opportunity amid ongoing market uncertainty.
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