Actually Turning Silver’s Devastating Volatility Into Monthly Income

After a year-long parabolic rise, silver peaked at $118 per ounce on January 28. I hope you’ve accumulated some silver exposure in the $30 to $50 range and are still nicely profitable at the current $74 per ounce. After the recent sell-off, I want to slowly increase my silver exposure until the next up-leg starts.

I am using two different silver-linked investments that let me profit even from down days in the precious metal.

OneGold.com lets you buy and sell physical precious metals. OneGold uses blockchain technology to track your investment holdings. They let you invest in any amount of ounces or dollars—even fractional ounces. OneGold has the tightest spreads I have seen for buying and selling.

Since the end of the January selloff, silver has fluctuated between the low $70s and the mid $80s per ounce. When silver has a big down day—say a drop of 5% or more—and at current pricing, is in the low $70s, I buy a few ounces. I plan to accumulate ounces over time.

This link can get you $20 if you open and fund an account at OneGold.

For the second leg of my silver investing, I own shares of the UBS ETRACS Silver Shares Covered Call ETN (SLVO). This ETN tracks a notional covered call strategy on iShares Silver Trust (SLV) and pays monthly dividends. With the recent volatility in silver, the SLVO dividends have been hefty. For February, the dividend was $7.91, while SLVO was at about $95. The UBS website shows a yield of 68.68%. Dividends are highly variable.

The SLVO share price has risen as silver has climbed. 

When a stock or fund goes ex-dividend, the share price drops by the dividend amount on the ex-dividend date. This means the SLVO share price fell by nearly $8.00 after the ex-dividend date. I am using this dividend effect to buy more shares after the drop. The new shares will then earn monthly dividends.