To The Moon

In early trading on December 29th, Beijing time, precious metals fluctuated sharply again, especially the short-term sharp rise and fall of international silver prices. After breaking through the US $83/oz mark in early trading, they quickly turned down, with the maximum intraday fluctuation reaching about 9%.

In the past two trading days, the volatility of silver prices has been significantly enlarged. Last Friday (December 26th), the silver price rose by about 10% in a single day, the largest single-day increase since 2008. So far in 2025, the largest annual increase in silver prices has exceeded 185%. Even if it falls back from the early high, the year-to-year increase in silver prices is still around 170%, and it is expected to achieve its best annual performance since 1979.

Driven by tight supply and rising industrial and speculative demand, silver has performed significantly better than gold since the second quarter of 2025, and the gold-silver price ratio has also quickly dropped from the level of around 104 hit in April to below 60. It even once touched the level of around 55 in early trading on the 29th. Especially in December, the spot silver price broke through three integer levels of $60, $70 and $80 in a row.

In addition, it is worth noting that the Chicago Mercantile Exchange (CME) stated that it will comprehensively raise the performance bonds for various metal futures including gold, silver, and lithium after the market closes on December 29, local time. This means that the initial margin for the silver futures contract expiring in March 2026 will be raised to $25,000.

GLD Bull Put Spread Strategy

1. Strategy structure

Investors in$Gold ETF-SPDR (GLD) $Create aBull Put Spread Bull Put Spread, consisting of twoSame maturity dateComposition of Put options:

• Sell Higher Strike Put (Short Put)

  • Strike priceK ₂ = 405,Received from premium$3.10

  • (Higher execution price and higher premium are the main sources of income)

  

• Buy lower strike price Put (Long Put)

  • Strike priceK ₁ = 400,Payment premium$1.94

  • (Used to limit maximum losses when GLD falls sharply)

  

The combination isCredit type, moreSpread strategy. Investor expectationsGLD holds near or above $405 at expiration, even if there is a slight correction, as long as it does not significantly fall below the key support range, you can still obtain gains.

Initial net income

Net premium (per share) = Revenue from selling Put − Cost from buying Put = 3.10 − 1.94 =$1.16

The GLD options contract multiplier is100, therefore:

Total net income = 1.16 × 100 =$116/contract

👉 This is the strategy'sMaximum potential profit。

3. Maximum profit

Maximum profit = initial net premium received

Maximum profit =$116/contract

The occurrence conditions are:

• GLD expiration price ≥ $405

• Both Put options are out of the money and go to zero

• Investors retain all premium rights

4. Maximum loss

The largest loss occurs whenGLD drops sharply and falls below $400Time.

Strike spread = 405 − 400 =$5

Maximum loss (per share) = Strike spread − Net premium = 5 − 1.16 =$3.84

Total maximum loss = 3.84 × 100 =$384/contract

The occurrence conditions are:

• GLD expiration price ≤ $400

• The spread is fully triggered and the loss reaches the upper limit

5. Break-even point (BEP)

Breakeven point calculation method: = higher strike price − net premium = 405 − 1.16 =$403.84

Maturity judgment rules:

• GLD ≤ 403.84→ Investor losses

• GLD = 403.84→ No profit, no loss

• GLD ≥ 403.84→ Earnings for investors

6. Risk and return characteristics

• Maximum benefit:$116/contract (limited)

• Maximum loss:$384/Contract (Limited)

• Profit-loss ratio: about1: 3.3

Applicable situations

• Investor judgmentGLD won't significantly break below 405

• Market environment biasedHigh volatility, sideways or moderate upward trend

• Hoping to passTime value decayCapture premium gains

• At the same time through the spread structureStrictly limit downside risks