I used to write puts on silver back in the day when silver was really low. I’d place them where the percent change / beta needed to move them into the money hadn’t occurred in the last 40 years. Somebody would always buy them. I figured it must be someone hedging like a producer or someone with some trading strategy that needed to cover.

The idea was that Silver (similar to now) was at that time below the production price and a lot of the Mexican mines had already closed and more were closing, so the chances of silver falling much more was extremely slim.

The puts were pretty far outside and so were cheap, and the margin needed to cover these was pretty high, so I didn’t make much on each one when compared to the cost of holding up that margin. I had to stop when silver recovered.

I think the idea behind holding onto physical silver rather than using options is that Silver may take a long time to recover, I remember that even Warren Buffet lost this bet 8 or 10 years back and sold out before silver recovered.