Silver extremely out-of-the-money options flood the headlines, betting on silver prices reaching $1,000 by the end of the year, analysts call it a scam!

How AI · Carley Garner Interprets Volatility Signals in the Options Market?

Social media is abuzz with heavily out-of-the-money silver call options with a strike price of $1,000. Some views see them as “smart money” positioning, while professionals directly call them junk trades—an actual retail-investor scheme of low-cost speculation and a short-squeeze play.

The silver market is showing signs of stabilizing, with prices hovering around $75 per ounce. As market sentiment warms up, some analysts still warn investors not to be swept up by the hype on social media.

On Tuesday, trending topics on the social platform X focused on a surge in extremely out-of-the-money silver call options, with some commentary mentioning December options with a strike price of $1,000. Some finance influencers interpret this massive spread as “smart money” betting that silver prices will surge significantly by year-end.

But commodity analysts warn that these call options are nearly absurd and are “junk” trades.

Some market analysts say these options are an attempt to “speculate” that silver will return to its January highs, and they expect this to trigger yet another round of price crashes.

Carley Garner, co-founder of DeCarley Trading, told Kitco News that although the Chicago Mercantile Exchange (CME) lists December silver call options with a strike price of $1,000, currently there are no open positions on any contract, meaning the contract has not been actively traded yet.

However, she noted that the surge in these extremely out-of-the-money options has two major drivers.

First is the market structure—retail investors seeking low-cost investment channels.

“Because silver options are expensive, small retail speculators can only buy extremely out-of-the-money call options, since that’s the only choice they can afford,” she said. “Currently, silver futures margin is over $50,000, and the at-the-money December 2026 call option price is about $60,000. If you want to take a long-term position and are only willing to take a risk of a few thousand dollars, you can only choose the December $1,000 call option.”

She added that the natural gas options market in 2022 also saw a similar scenario, with the strike price once rising to as high as $40.

“Even people buying $1,000 silver call options likely don’t think silver will rise to that level. They just want to participate in the action and avoid margin pressure.”

Garner said that the second driver is more malicious—it’s essentially the same as the strategy used in the Reddit retail traders’ GameStop short-squeeze game.

“If a large volume of extremely out-of-the-money call options are bought, the market makers selling those options will hedge their risk, and ultimately they will be forced to buy futures, which in turn pushes prices upward in a self-reinforcing way. This pattern is unhealthy, has nothing to do with fundamentals, and is fundamentally a pump-and-dump.”

Garner is bearish on gold and silver, believing that the parabolic rise over the past few months is not sustainable. She also said that the options market’s hype signals are skewed bearish.

“Large-scale buying of these options will raise the market’s implied volatility,” she said. “High volatility in the options market is always temporary, and it almost always comes with trend reversals.”