Now onto what I’m doing.
I’m mostly sitting. I hold more cash than I normally hold (25%). The reasoning is straightforward: in a 20-25% PM drawdown I want to be a buyer, not looking at positions that are bleeding alongside the broader market. Cash in IBKR pays roughly 3% just sitting there, which is not nothing while you wait.
The cost of the drawdown is not worth the cost of missing the first 10% or even 20% of the eventual recovery.
Alongside the cash, I’m holding long-dated calls. Specifically SLV LEAPS and SILJ LEAPS, both with expirations in 2027 and 2028. The thesis behind the structure: if I’m wrong about the squeeze and silver just grinds higher from here, the calls capture the move without requiring me to be fully invested in the underlying. If I’m right about the squeeze and silver drops 25%, the calls take a beating on delta but the long expiration means I have time for the structural thesis to play out, and I can add to the position at much lower premiums during the panic. The combination is a barbell. Cash on one side for downside protection and dry powder. Long-dated optionality on the other side to capture the eventual repricing without timing the exact bottom.