Don Kaufman here.
Silver just did something that should make you pay attention.
SLV traded 1.4 million option contracts by 1:30 pm.
Six months ago, this thing was lucky to do 30,000 contracts all day.
Now, let me tell you the silver story - because what's happening right now is no accident.
The Meeting That Moved Markets
Back in 2011, I'm sitting in a meeting at Thinkorswim in Chicago. Silver's exploding higher - and it looks exactly like what's happening today.
Massive squeeze, everyone's going crazy.
This kid interrupts our meeting. Guido - yeah, that's his real name. He's maybe 24 years old at the time, been working there since he was 17. Kid's got a feel for risk like nobody I've ever seen.
He walks in and says to Tom Sosnoff: "Hey, I'm about to change risk for silver."
We stop everything. Because here's what we knew - if Guido changed our margin requirements, the Chicago Mercantile Exchange was gonna follow. This kid had that kind of influence.
Think about what happens when you raise margin requirements in the middle of a massive run-up. You're gonna force a lot of people out of positions. That's by design.
The Trade of a Lifetime
So all of us looked at each other and went short silver. There was a product back then called ZSL - inverse silver. We bought tons of it.
Was it wrong? I don't really give a damn. Closest I've ever gotten to any kind of insider trading, but it was a really good day.
Because Guido literally changed the margin requirements, and silver collapsed right after. Chicago Mercantile Exchange followed an hour later.
We're like, wow - you just moved a global market because a kid in Chicago clicked a button.
Why Today Changes Everything
Here's what's happening right now: Silver's holding almost $20,000 in margin at Charles Schwab as of this morning. Different brokerage platforms are scrambling to adjust their requirements.
And that same kid? He's still in the industry. Still running margin. And guess what - he's already started changing requirements again.
When he moves, the whole industry moves. One guy. It's just a geek, but he has a really good feel for risk.
What This Means for You
Silver is absolutely in play right now. This is the kind of chart you better watch out for. If you're gonna trade silver, move to SLV and only use its options.
This thing is in the middle of an absolute squeeze, and it's gonna get wild. We've traded this product again and again, caught most of the breakouts.
Today's volume isn't 10 times normal - that's not even close to describing what's happening here.
The Lesson
Markets have a way of teaching the same lessons over and over. When you see volume explode like this, when margin requirements start moving in real time, when you've got the exact same setup as 2011...
History doesn't repeat, but it sure as hell rhymes.
And silver? Silver doesn't forget.
To your success,
Don Kaufman