Silver prices rebounded to $75, with analysts criticizing the speculative frenzy surrounding $1,000 call options.
2026-04-01 10:35:22
The silver market has recently shown signs of stabilization, with prices rising to around $75 per ounce at one point.
As new optimism emerges in the market, some analysts have issued timely warnings, reminding investors not to be easily swayed by the rapidly brewing hype on social media, and to avoid paying the price for blindly following the crowd.
On Tuesday (March 31), the significant increase in extremely out-of-the-money call options in the silver market quickly became a hot topic on the social media platform X. Some market participants specifically mentioned option contracts expiring in December with strike prices as high as $1,000. Some financial market influencers interpreted this huge price difference as "smart money" betting on a significant rise in silver prices before the end of the year, believing it reflects strong optimism from institutional or professional funds regarding the market outlook.
However, this phenomenon has also quickly sparked widespread discussion and vigilance among industry insiders.
While some voices are optimistic about these options, many commodity analysts hold a completely opposite view. They explicitly warn that these call options are approaching absurdity and are essentially typical "junk" trades.
One market analyst further pointed out that such options trading is likely just a ploy to push silver prices back to their January highs, and once that goal is achieved, he expects it will trigger a new round of sharp price declines . This view is particularly noteworthy in the current market environment because it directly addresses the core issue of price sustainability.
Carley Garner, co-founder of DeCarley Trading, stated that although the Chicago Mercantile Exchange has listed $1,000 silver call options expiring in December, the number of open contracts for these options is currently zero, clearly indicating that no traders are actually participating. She further pointed out that there are two main factors driving these extreme call options, which investors should understand in detail.
She explained that the first factor stemmed entirely from the natural consequence of market dynamics. As silver options prices became increasingly expensive, small retail speculators were forced to turn to call options with extremely out-of-the-money strike prices, as this was the only option they could afford. She added that margin holdings of silver futures contracts currently exceed $50,000, while at-the-money call options expiring in December 2026 are priced at approximately $60,000. For investors looking to make long-term investments but only willing to take on a few thousand dollars of risk, buying a $1,000 call option for December becomes a practically unavoidable choice.
She also mentioned that a similar situation occurred in the natural gas options market in 2022, when the strike price once extended to $40. Even investors who bought these $1,000 call options are unlikely to actually expect silver prices to reach such high levels; they simply want to participate in market movements without using large margin requirements.
She went on to say that the second factor might be more malicious. She pointed out that this operational strategy is exactly the same as the method used by retail investors when they squeezed out GameStop stock. If enough investors buy extremely out-of-the-money call options, then the dealers and market makers who sell these options will eventually be forced to buy futures contracts to hedge their own risks, and the resulting surge will be self-reinforcing and amplified.
She emphasized that this phenomenon is unhealthy, has nothing to do with the fundamentals of the silver market, and is essentially a modern version of a pump-and-dump scheme.
Ghana has long held a relatively bearish stance on the gold and silver markets. She believes that the parabolic upward trend in silver prices over the past few months is unlikely to be sustainable.
She added that such speculative frenzy in the options market could itself be a bearish signal. Large-scale buying of such extreme options can significantly increase implied volatility in the market, and abnormal increases in options market volatility are often temporary and almost always accompanied by a reversal of price trends.
In conclusion , although silver prices have rebounded to $75 per ounce in the short term and shown signs of stabilization, the heated speculation surrounding extremely out-of-the-money call options on social media platforms, and the resulting market sentiment volatility, have become risk factors that warrant close attention. Analysts such as Ghana remind investors that remaining rational and focusing on fundamental analysis is particularly important in the current environment, avoiding being misled by short-term speculation to prevent unnecessary losses in the event of a potential price reversal.
Market participants need to closely monitor subsequent options trading and changes in actual open interest in order to better grasp the true direction of the silver market.
Spot silver daily chart source: EasyForex
At 10:34 AM Beijing time on April 1st, spot silver was trading at $74.45 per ounce.
As new optimism emerges in the market, some analysts have issued timely warnings, reminding investors not to be easily swayed by the rapidly brewing hype on social media, and to avoid paying the price for blindly following the crowd.
The X platform's heated discussion about extreme out-of-the-money options has attracted market attention.
On Tuesday (March 31), the significant increase in extremely out-of-the-money call options in the silver market quickly became a hot topic on the social media platform X. Some market participants specifically mentioned option contracts expiring in December with strike prices as high as $1,000. Some financial market influencers interpreted this huge price difference as "smart money" betting on a significant rise in silver prices before the end of the year, believing it reflects strong optimism from institutional or professional funds regarding the market outlook.
However, this phenomenon has also quickly sparked widespread discussion and vigilance among industry insiders.
Analysts point out that options trading is almost absurd and constitutes "garbage" trading.
While some voices are optimistic about these options, many commodity analysts hold a completely opposite view. They explicitly warn that these call options are approaching absurdity and are essentially typical "junk" trades.
One market analyst further pointed out that such options trading is likely just a ploy to push silver prices back to their January highs, and once that goal is achieved, he expects it will trigger a new round of sharp price declines . This view is particularly noteworthy in the current market environment because it directly addresses the core issue of price sustainability.
Explaining the truth behind options listings with zero trades
Carley Garner, co-founder of DeCarley Trading, stated that although the Chicago Mercantile Exchange has listed $1,000 silver call options expiring in December, the number of open contracts for these options is currently zero, clearly indicating that no traders are actually participating. She further pointed out that there are two main factors driving these extreme call options, which investors should understand in detail.
She explained that the first factor stemmed entirely from the natural consequence of market dynamics. As silver options prices became increasingly expensive, small retail speculators were forced to turn to call options with extremely out-of-the-money strike prices, as this was the only option they could afford. She added that margin holdings of silver futures contracts currently exceed $50,000, while at-the-money call options expiring in December 2026 are priced at approximately $60,000. For investors looking to make long-term investments but only willing to take on a few thousand dollars of risk, buying a $1,000 call option for December becomes a practically unavoidable choice.
She also mentioned that a similar situation occurred in the natural gas options market in 2022, when the strike price once extended to $40. Even investors who bought these $1,000 call options are unlikely to actually expect silver prices to reach such high levels; they simply want to participate in market movements without using large margin requirements.
She went on to say that the second factor might be more malicious. She pointed out that this operational strategy is exactly the same as the method used by retail investors when they squeezed out GameStop stock. If enough investors buy extremely out-of-the-money call options, then the dealers and market makers who sell these options will eventually be forced to buy futures contracts to hedge their own risks, and the resulting surge will be self-reinforcing and amplified.
She emphasized that this phenomenon is unhealthy, has nothing to do with the fundamentals of the silver market, and is essentially a modern version of a pump-and-dump scheme.
Ghana remains cautious about the long-term trend of gold and silver.
Ghana has long held a relatively bearish stance on the gold and silver markets. She believes that the parabolic upward trend in silver prices over the past few months is unlikely to be sustainable.
She added that such speculative frenzy in the options market could itself be a bearish signal. Large-scale buying of such extreme options can significantly increase implied volatility in the market, and abnormal increases in options market volatility are often temporary and almost always accompanied by a reversal of price trends.
In conclusion , although silver prices have rebounded to $75 per ounce in the short term and shown signs of stabilization, the heated speculation surrounding extremely out-of-the-money call options on social media platforms, and the resulting market sentiment volatility, have become risk factors that warrant close attention. Analysts such as Ghana remind investors that remaining rational and focusing on fundamental analysis is particularly important in the current environment, avoiding being misled by short-term speculation to prevent unnecessary losses in the event of a potential price reversal.
Market participants need to closely monitor subsequent options trading and changes in actual open interest in order to better grasp the true direction of the silver market.
Spot silver daily chart source: EasyForex
At 10:34 AM Beijing time on April 1st, spot silver was trading at $74.45 per ounce.
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