IShares Silver Eclipses Invesco QQQ in Options Market as Investors Flee
$iShares Silver Trust(SLV)$
Open interest, or the tally of outstanding options contracts tied to SLV has climbed to 11.11 million put and call options, surpassing QQQ's 8.05 million. SLV is now just behind $NVIDIA(NVDA)$
Investors and speculators flocked to the options market as $407.3 million were withdrawn from the silver ETF Monday, the fourth straight net outflow. Investors were pulling money out as they locked in gains from silver's record-breaking rally that sent prices of the metal soaring more than 260% in the spot market over the past year.
Money managers have also been paring their bullish wagers on silver, cashing in gains from a relatively illiquid market compared to that of gold. In the week ended Jan. 20, their combined net long positions declined 25% to 11,326 silver futures contracts, the lowest in almost two years, the latest Commodity Futures Trading Commission (CFTC) data compiled by Bloomberg show.
On Tuesday, the bulls got a glimpse of what a downturn could look like. $Silver - main 2603(SImain)$
The precious metal that's also used in making solar cells, batteries, and electrical circuits for data center infrastructure, has seen demand outpaced supply every year since 2021, according to the Silver Institute.
Last year, silver was added to the U.S. Geological Survey (USGS)'s list of critical minerals because of its vital role in U.S. economic or national security.” That highlights its essential function in domestic manufacturing and further fueled the bullish case for owning silver.
The rally has taken the ETF's 14-day relative strength index above 70 for a fourth straight session Tuesday. That signals to some who study charts that an asset may have risen too far too fast, and could be poised for a downtrend. Even the Bollinger Band agreed after the metal's price climbed above the upper line of that band.
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