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Some Redditors Have Silver ETFs In Their Sights

January 28, 2021 10:00 am
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Some Redditors Have Silver ETFs In Their Sights

To say Reddit forum WallStreetBets accumulated infamy and notoriety and more in the span of a few days is an understatement. Just ask market participants holdings short positions in AMC Entertainment Holdings (NYSE:AMC) and GameStop (NYSE:GME), just to name a pair.

What Happened: With heavily shorted stocks and their subsequent squeezes all the rage these days, WSB is drawing a crowd and with a crowd comes ideas – some credible, some not so much.

Time will tell what comes of this notion, but one Redditor is suggesting a Hunt Brothers redux, advocating for going after the silver market.

“Silver Bullion Market is one of the most manipulated on earth. Any short squeeze in silver paper shorts would be EPIC,” according to a Wednesday WSB post. “We know billion banks are manipulating gold and silver to cover real inflation. Both the industrial case and monetary case, debt printing has never been more favorable for the No. 1 inflation hedge Silver.”

Why It's Important: Again, it remains to be seen what comes of this, but if the WSB crowd can affect the price of silver, various exchange-traded funds stand to benefit, namely the iShares Silver Trust (NYSE:SLV) and the Aberdeen Standard Physical Silver Shares ETF (NYSE:SIVR).

Both of those ETFs are backed by physical holdings of the white metal.

“Inflation adjusted Silver should be at 1000$ instead of 25$. Link to post removed by mods. Why not squeeze $SLV to real physical price,” according to the Reddit post. “Think about the Gainz. If you don't care about the gains, think about the banks like JP MORGAN you'd be destroying along the way.”

That reference to JPMorgan Chase (NYSE:JPM) pertains to the bank's alleged manipulation of the silver market.

What's Next: The Reddit post garnered 2,700 comments with plenty of WSB community advocating for the idea of cornering the silver market. Some like the idea of getting vengeance on JPMorgan for depressing their silver investments.

It's a big “if,” but if Redditors are successful in making silver prices appreciate in dramatic fashion, some ETFs could shine, too.

The ProShares Ultra Silver (NYSE:AGQ) comes to mind. That ETF looks to deliver double the daily performance of the Bloomberg Silver Subindex.

Why not a leveraged silver ETF? After all, what's market participation in 2021 unless one is making money in rapid fashion?

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