Gold and Silver up recently. Danger territory, it can grow further or decline. If positions closed now the current profit will be locked, but the **future profit missed**.
What to do? (no good solution for Silver)
**Gold**: protect with puts x0.85 6months. Puts are cheap, good solution. Won't protect against slow and long decline though.
**Silver**: no good solution, options are very, very, very expensive.
**1)** Close 50-100% of silver positions and move it into Gold protected with puts.
**2)** Explosive hedge. Buy large volume (x4 of stock volume), of cheap far otm puts x0.5 4months. Won't help in small-medium decline. But for large sudden drop could go x10 and reduce losses.
**3)** Close silver positions and move to silver miners (say WPM). They say silver miners are not yet fully appreciate silver metal up move, so for silver miners the upside potential could be higher. Silver Miners are more reactive than the silver, both up and down. Yet - strangely, puts on miners are a little bit cheaper than puts on silver. So strange situations - more volatile with higher up potential and with cheaper puts. I think at least 30% of silver positions should be closed and go into silver miners protected with puts. Still puts are very costly.
**4)** Close silver positions, use 5-10% of money to buy WPM call x1.5 1-2years. The call is insanely costly and would go almost to zero with medium decline, yet 90% of silver profit will stay safe and there will be some exposure to future up move.
I have been thinking about this for days, can't decide what to do with silver, any **better ideas**?
Note - in my opinion options are better on GLD/SLV because of high liquidity. Yet for positions it's safer to use PHYS/PSLV or miners stocks.