Isn’t the borrow rate on $zsl 40-50%? I get that these are decaying to $0, but that seems a really steep price to pay in a scenario where the silver boom takes longer than expected. Great info nonetheless, always appreciate your out of the box takes.
It is expensive; through the years I've shorted most of these leveraged inverse ETFs and the cost has been on average high but net worth it. It can sometimes be somewhat mitigated with options. But it is a stronger case to not own them than it is to short them directly.
Thanks for elaborating, the way you described how it’s “expensive but probably worth it” makes a lot of sense. Holding a lot of physical and have a separate brokerage account since 2019 for PM stocks, so I’m optimistically waiting for the silver tsunami to hit as well. Cheers!
Silver tsunami hit. ZSL -79% since post. Glad that didn't take longer than expected. It is very different at ~$5 than it was $25. What now? Now it might be reasonable to consider writing puts against the short ZSL position in order to exploit its white hot implied volatility. For example, you could write January 16, 2026 $5 puts which have a $0.45 bid and $0.50 ask and last traded for $0.47. If ZSL is above $5 at expiration, then you just collect some high monthly premium. If it is below, then you get out at a net price of $4.53 which more than compensates you for the expensive borrow.
Thanks for following up on this thread, Chris. Very happy with how things have been developing in PM’s. You really know how to squeeze max juice out of this lemon, will definitely take another look from the opposite end of the trade now. Cheers!
Isn’t the borrow rate on $zsl 40-50%? I get that these are decaying to $0, but that seems a really steep price to pay in a scenario where the silver boom takes longer than expected. Great info nonetheless, always appreciate your out of the box takes.
It is expensive; through the years I've shorted most of these leveraged inverse ETFs and the cost has been on average high but net worth it. It can sometimes be somewhat mitigated with options. But it is a stronger case to not own them than it is to short them directly.
Thanks for elaborating, the way you described how it’s “expensive but probably worth it” makes a lot of sense. Holding a lot of physical and have a separate brokerage account since 2019 for PM stocks, so I’m optimistically waiting for the silver tsunami to hit as well. Cheers!
Silver tsunami hit. ZSL -79% since post. Glad that didn't take longer than expected. It is very different at ~$5 than it was $25. What now? Now it might be reasonable to consider writing puts against the short ZSL position in order to exploit its white hot implied volatility. For example, you could write January 16, 2026 $5 puts which have a $0.45 bid and $0.50 ask and last traded for $0.47. If ZSL is above $5 at expiration, then you just collect some high monthly premium. If it is below, then you get out at a net price of $4.53 which more than compensates you for the expensive borrow.
Thanks for following up on this thread, Chris. Very happy with how things have been developing in PM’s. You really know how to squeeze max juice out of this lemon, will definitely take another look from the opposite end of the trade now. Cheers!