To The Moon

During the trading session in New York on January 29, the precious metal market suddenly "changed its face". Gold plunged rapidly from around US $5,530 per ounce, falling as low as US $5,105.83 at one point, with the largest intraday drop reaching 5.7%, and the single-day amplitude exceeding US $400; Silver's volatility is even more exaggerated, falling straight back from its all-time high of $121.67 to $106.80, with the largest drop of 8.5%. But dramatically, gold and silver then went out of the deep V rebound almost at the same time. In the end, gold only closed down slightly by 0.69%, and silver only closed down by 0.64%. This is more like a sudden brake dominated by sentiment and liquidity than a signal of a real trend reversal.

From the perspective of market logic, the core reason for this dive is not complicated. After gold and silver continuously set new highs before, short-term profit-taking orders are already highly concentrated, especially gold has risen for eight consecutive trading days, with a cumulative increase of more than 23% in January. In this context, any disturbance may trigger a concentrated take-profit, amplifying intraday fluctuations. But the key point is that the price has not "fallen"-the rapid return of funds at a low level shows that the market has not given up the medium-term logic, but only repriced the rhythm at a high level.

Because of this, the current gold and silver market is not a good direction. Chasing the rise is easy to be killed, and short selling may be slapped in the face by a rebound at any time. There is only one truly clear signal:The volatility is big, but the trend is not bad。 In this environment, instead of struggling with whether the next step is to rise by 3% or fall by 2%, it is better to think about how to turn the "violent shock itself" into a source of income. For traders, this often means shifting from "betting direction" to "earning probability" and "earning time".

In terms of specific operations, it is more in line with the current rhythm to build a premium strategy around silver-related targets. With$2x Long Silver ETF-ProShares (AGQ) $For example, in the context of high volatility, its options premium is well priced, throughBull Put SpreadIn this way, there is no need for silver to continue to soar, as long as the price does not drop significantly, you can let time slowly help you make money. In a volatile market, patience is often more valuable than judgment, and it is easier to leave the volatility to strategy.

AGQ Bull Put Spread Strategy

1. Strategy structure

Investors in$2x Long Silver ETF-ProShares (AGQ) $Build aBull Put Spread Bull Put Spread, andMake 2 sets (double) of spread combinations。

The strategy belongs toLimited benefits, limited risksBullish strategy, suitable for judgmentAGQ Stays Strong, No Significant Drop Ahead of ExpirationSituation.

(1) Single group Put spread structure

1 ️ ⃣ Sell higher strike price Put (main source of income)

• Sell 1 Put with K ₂ = 325 and charge premium: 3.05

As long as the AGQ expiration price≥ 325, the Put will be completely invalid, and all premium rights will be included in the earnings.

2 ️ ⃣ Buy lower strike price Put (downside risk protection)

• Buy 1 Put with K ₁ = 320, pay premium: 2.43

This Put is used to provide protection in the event of a significant decline in AGQ, therebyLock in the maximum loss, to avoid the huge downside risk of naked selling Put.

3 ️ ⃣ Net income from single group Put spread (per copy)

Net premium = Sell Put − Buy Put = 3.05 − 2.43 =0.62

2. Twice (2 groups) the overall initial net income

Because investors do2 sets of bull put spreads：

• Single group net premium: 0.62

• Net premium in both groups (per share): 0.62 × 2 = 1.24

Initial net income (per 1 option contract)

Note: If 1 contract = 100 shares

• 1.24 × 100 = 124

👉 The124That is, this strategyMaximum potential profit。

3. Maximum profit

When AGQ expiration price ≥ 325:

• Two sold 325 Put all expired out-of-the-money

• Two bought 320 Put also invalidated

Investors obtainAll premium earnings：

• Maximum profit per share: 1.24

• Maximum profit per contract: 124

📈Market performance requirements:

• AGQ does not fall

• Maximum gains can be achieved either up or sideways

4. Maximum loss

1 ️ ⃣ Strike spread width

• Single group spread width = 325 − 320 =5

• Both groups are still5(not doubling)

2 ️ ⃣ Maximum loss calculation (per share)

Maximum Loss = Strike Spread − Net premium = 5 − 1.24 =3.76

3 ️ ⃣ Maximum loss (per contract)

• 3.76 × 100 = 376

📉Conditions of occurrence:

• AGQ Expiration Price≤ 320

• Both sets of spreads are fully triggered

5. Break-even point

Breakeven price (the only one)

Breakeven = Sell Put Strike Price − Total Net premium = 325 − 1.24 =323.76

Maturity judgment rules

• AGQ > 323.76 → Earnings

• AGQ = 323.76 → No Profit, No Loss

• AGQ < 323.76 → Loss

6. Risk and return characteristics

• Maximum yield: 124/contract (limited)

• Maximum loss: 376/contract (limited)

Profit-loss ratio

Gain: Loss ≈ 124: 376 ≈1: 3.03

📌 The strategy belongs to:

• High winning rate

• But the profit-loss ratio is low

• Very typicalCredit collection premium strategy

7. Strategic characteristics and applicable situations

Strategy Characteristics

• Bullish strategy (bullish/bearish)

• Doesn't ask for big AGQ gains

• The main revenue derived fromTime Value Decay (Theta)

• When opening a position, you can clarify the maximum return and maximum risk

• Locking in Extreme Downside Risk with Buy Put

• Compared with naked selling Put, risk controllability is significantly improved

Applicable situations

When investors judge:

• Silver's medium-term trend is bullish

• AGQ Short TermWill not fall below key support near 324

• Hope inDefine the upper limit of riskUnder the premise of

• PassTime value of sellingStable access to premium