Options markets are pricing extreme near-term volatility in silver. The 30-day implied volatility of 38% is well above the 24% level at the start of June and represents an 80th percentile reading over the past year. The put skew indicates market participants are paying a premium for downside protection.
The $60 strike was the epicenter of options activity, with more than 12,000 contracts traded on June 24-25 combined. As the futures price dropped below $60, the open interest at this strike surged, suggesting a battle between put sellers defending their short positions and put buyers betting on further declines.
The average true range expanded to $2.10/oz, the highest since March 2025. For context, ATR averaged $1.10/oz in May. This means silver is moving more than 3.6% per day, compared to a typical day in May of 1.7%. Large intraday swings create both risk and opportunity for traders.
The technical picture for silver is worse than gold. The 50-day moving average at $67 is well above current prices. The 200-day MA at $50 is the next major support, representing a further 14% decline from current levels. Relative strength indicators are already oversold.
The $60 break is significant for silver buyers. Futures hedges should use $55 puts as protection while waiting for stabilization. Implied volatility at 38% makes options strategies expensive. Consider waiting for vol to compress before hedging, or use futures directly instead of options for exposure.