Thursday, July 3, 2014

Cheap Deflation Insurance

Silver put options.

Silver was a parabolic bubble that ended in spring 2011, and parabolic bubbles typically end below their starting point, which would be $5-10 per ounce. Coincidentally, that is still approximately the marginal cost of silver production.

A $15 SLV put for Jan 2016 costs 35 cents. A $10/$15 put spread would cost a net of about 30 cents. That implies a 6% chance that silver will retrace its bubble and go back to the marginal cost of production over the nest 18 months.

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Delhi Escorts - Madhu said...
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