My my brokerage that I have my long term in investments with, I was able to request permission for a futures account. I already have a margin account, and options ability – so I think these places need you to request permission so they can ensure they aren’t handing the keys to a ferrari to an 8 year old.

While I’m not an evil “paper trader” like the big banks, the idea with this at the retail level is to speculate on price. I feel this is a healthy part of the futures markets. What I have issue with is a few things…

  1. larger players abuse the system. Since silver is a tiny market, it can be moved quickly.
  2. The lack of separation between banks who have metals and those who own the platforms to trade them. I guess my issue is that ABC bank can have a massive silver pile, the price is at $23.06, and they know that there are a ton of stops at $23. They can sell into this, push over the dominoes, and quickly buy back after the dominoes have fallen.

The idea to trade futures has been with me for years, but I never had the right setup/time to do it. Originally, my second Palisades interview covered the monthly beatings in silver. I had posited that it had to do with silver options expiration. I believe that is a big part of it. However, some of it has to do with the fact like with mine, the guy told me I had to be out by Feb 24th. They would call me during the week to remind me. If not, they would liquidate me by the 26th. I observed RADICAL monthly price swings like 18 months ago and played miners to do for a monthly.

With this, you could see the dangers each month of buying a silver contract – and then holding it. Bad price swings down, which usually started around the 18th-20th of each month. Some months the silver contracts trade as a “delivery month” (note, they deliver all the time) and these delivery months I believe could account for the larger price swings. If you look at my trading platform, I couldn’t even buy options on non-delivery months. So this MIGHT account for why some are much more smashed than others.

Likewise, AFTER you see the options expiration, you’d see a recovery. You can see PRECISELY where my theory bit the dust.

This showed then usually a few days after the options expiration, people then got back in to silver paper contracts to ride it up for the month. Until December 2021, when I got crushed. I had bought a lot of my FSM stocks in Nov 2021, and the subsequent smash down got beaten down another month.

During a lot of that chart, I was buying options on bigger names and selling around options times. It was clunky. Miners and metals have strong correlations, until they don’t. Some days you might see gold and silver rocket up, and the miners yawn because they know a beating is coming.

So – this was the inner month type of volatility. Had I played a futures contract on this, I would have done nicely – look at those recoveries! A single contract playing that could have gotten me $5-10k per month – and up to $25,000 one month. But….lots of risk here too. Had I bought in to my theory on Dec 1st, I would have been wiped out.

I put a pin in this. My buddy is a pro trader for a hedge fund in Connecticut focusing on Soy Beans among other things. He extended an offer to talk to me someday about this, I think I’m going to take him up on it soon. With what happened in the markets, I wanted more direct access to some of these macro movements rather than playing the companies who produce them. The inflation of 2022 sent oil prices much higher – but crushed the margins of miners.

Establishing an experiment

I had seen a James Anderson chart a few years back and always kept it in the back of my mind. It seems overnight silver goes up, then on NY open it gets slammed. At some point this almost seemed daily.

After I posted this, James sent this Tweet to me copied…

This “experiment” is going to be to buy a silver/gold micro contract overnight, and sell in the morning before NY opens and smashes everything. Some days I’m up at 4ish, and will sell then.

The chart shows that the overnight price of silver is like $200 and the NY price is negative lol. The risk here is hopefully avoided by getting out hours before Mr. Slammy every day. The reward here is the upside captured every night, over 15-20 trading days.

Of issue, I may want to avoid being in this game the last week of the month. The contract volume starts to get lower as people are rolling over, and given the charts I showed higher up, I want to avoid getting rugged in the middle of the night 3 days prior to the delivery period.

I want to refuse to trade during the day, at all – maybe over lunch one day I pick a contract up. My main issue here is that there is a lot of intraday volatility, which can get massive upside, but also take you to the wood shed for $1 down in silver. I have noticed a vast majority of the rugging is at 8:30, but we have also seen 9:30 smashes just as the stock market opens.

I did it one night just to get a baseline. I was shooting for a $300 profit for 20 trading days. This is with gold AND silver. Why? I do, after all, want to make some money in this and there are times where silver is more spastic to gold. I didn’t want multiple silver minis then to smash me on a down night. So I also wanted to see if this trade applied to gold, which I believe it does.

WARNING – these charts may be outdated. A user hypothesized that this was due to the Japanese buying bonds at this time, as they are roughly half a day off from us. We know the last few months Japan has been selling bonds. I feel IF this is true, we may not have the MASSIVE upside, but I think we are still avoiding a lot of the downside risk of the NY times.

(I think this is Ditch. I didn’t see his @user until now. I interact with a decent amount of you in DMs but never him. I’m not some famous person, I like nerding out with my friends here.)

Silver and gold micros

When I was looking at futures, the idea here was that you put perhaps $10,000 in a futures account, and bought a 5,000 silver contract – worth roughly $125,000. The accounts are “mark to market” which means at the end of each trading day, you get reconciled. Assume silver went up from $25 to $26 one day. That is the $125,000 you see there = 5000 x $25.

With this, you control 5,000 oz. If it went up $1, that means your value went up $5,000. If you have to put $10,000 in as margin to get going, that means that in a single day you can have a 50% up day. I believe this is the allure to the gambling part of people out there, and it is the big danger when silver goes DOWN $1 in a day. That’s a 50% loss in a day. However, I believe the gambling brain in people hyper focus on the 50% upside and this is how a lot of people can get wiped out in futures.

A micro silver is 1,000 oz and a micro gold is 10 oz. My brokerage does not do physical delivery, and if I go into a coma, they will trade me out the last day of their window for me. I would prefer to sell out on my on conditions.

Ask yourself – in the last 3.5 years, how many $1 up days did you see, and how many $1 down days did you see? My Bet is 10:1 more $1 down days.

Well, with a micro silver, it’s 1,000 oz and not $5,000. I’m not a super high roller like a lot of the people you see on Twitter. I don’t sell a trading service. I don’t sell anything. Like you, I’m a retail guy here trying to figure things out, and have had really good trades and really bad ones. I am learning as I go, but with this, you have to manage downside risk. For me here, a micro does the job well, as I can absorb 3 down days of $1 in silver in a micro, but not in a standard contract. Likewise, my upside is muted to $1:1 instead of $5:1.

Am I trying to get rich with this experiment? No. Not yet, anyway.

The idea with this experiment is to track how this trade goes. At the end of a month, I may have 10 up days of $300 and 6 down days of $300. This is $1200 profit in a month. However, given I’m using about $4000 between the two contracts, it’s still a 33% trade on a month – while I sleep.

What my HOPE is, is that I’m banking $200-$500 a night for about 17 trading days, give or take, and avoid the nasty drops you see above. That could bank me $3400 to $8500 – somewhere between, hoping for maybe a $5000 profit. That’s a 125% profit in a month. The allure of this is interesting to test. However, one big down day for me at 2AM could derail this, so I’m going to keep this for one month and check back around March 10th, as I might then also do a concurrent experiment where I buy a silver contract and hold that for 3 weeks to test the recovery theory above. At issue, is that one could have volatile daily performance and really mess my main experiment up. But – I’m using minis.

IF this experiment goes well, and I start to get familiar with this, I may eventually graduate to the bigger contracts.

Note – I also want to look at a mini oil and a mini nat gas. Not sure I can afford this, at this time, as a rough down day for fossil fuels/PMs could seriously hurt. I have to look closer to see if there’s anything there with oil/nat gas trade times. I feel oil could have some downside in the 60s, but can also have another upside into 100-120 with the US at SOME POINT stopping the selling of the SPR. With the mini oil and nat gas, these may be longer holds.

Lastly, I think I’m going to experiment with stops. Assume I bought a contract at $22.10 last night. I could have a sell order STOP at $21.90. This would cap my overnight loss at $200 if there’s a sell off. The $22 could be breached and take out stops, but it might stop before $21.90 and perhaps rebound to $22.30. This would keep me in the trade, with some downside protection. When I wake up, I could then cancel my sell order (stop) and then sell my long at $22.30.

This worked last night (with no stops) for $281 between a gold AND silver mini. Remember, gold had some crazy up moves and got smashed down. Part of me thinks there’s a $50 rug coming during the NY time on some numbers, some day, and part of me thinks a floor may have been hit and a sideways move here for awhile (with some upside during nights and downside during days) can rest the RSI for a monster move to come. I want to play the miners for the monster $500 rallies, but the overnights for lunch money.

Eventually, I may get brave enough to buy a corn or something, but I’m also VERY sketch about going short on anything. With going long, you can have infinite profits, but going short, you have infinite losses. Just like the downside stops, there needs to be upside stops when shorting or else you will be homeless, quickly.

With this experiment, I’m planning to go dark until March 10th on this. I plan on tracking all of this in a spreadsheet, as my trading platform isn’t giving me great stuff to track this. One also has to have taxes factored into this, which I have to look at closely.

Wish me luck!!


THIS IS AN EXPERIMENT. I may LOSE MONEY doing this. I am NOT a professional trader and am NOT A LICENSED financial advisor. I imagine a bunch of us sitting around a table drinking some beers, and we talk about doing this crazy idea and I say, “the hell with it…I’ll try it!” Do NOT try and replicate this, as you can lose serious amounts of money. I am only doing this after 3.5 years of having a trading account, then options, then margin, and then studying futures for the last few years. I want to document this experiment over about a month and use this for ACADEMIC RESEARCH. If you want to make a quick buck with PRO TRADERS – I AM NOT YOUR CHANNEL. There are many people who charge for services that have done this professionally. I AM NOT ONE OF THEM. I have an MBA, love to play with technical charts, and feel I have a master grasp of the MACRO in the world today. I am trying to experiment and understand ways of making money off of what I see is coming. My trading account is a HEDGE against my real estate holdings, so this is why you won’t see me talk about Apple or any traditional equities. I am focused mostly on precious metals, battery metals, and energy.