Institutions seem to be increasing exposure to offshore drilling with RIG

RIG Flow

RIG added $1.6B of backlog in Q1, bringing total backlog to about $7.1B. That about a 29% increase.

Exposure from the options market is also growing on higher strikes

https://preview.redd.it/dzc1ls5z822h1.png?width=661&format=png&auto=webp&s=51052be1df48fab34a81b90fbf730ddc23f0a02e

NE, whichs is the other stock with notable flow added about $565M of new contract value, bringing backlog to around $7.5B -an 8% increase.

Higher for longer is being priced in.

Positioning on USO is building on $160 as well

https://preview.redd.it/wtzv0acii22h1.png?width=668&format=png&auto=webp&s=6459fdf0b66ab21190616c22433b27419d6d3796

I’m watching a volatility setup right now that I think is worth paying attention to.

Using Andrew Thrasher’s Forecasting a Volatility Tsunami framework, the idea is that volatility spikes are often preceded not simply by low VIX, but by compressed VIX and VVIX.

A low VIX reading alone is not enough. The stronger signal is when VIX has been trading in an unusually tight range, measured by its 20-day standard deviation.

The same idea can be applied to VVIX, which measures volatility-of-volatility.

The paper’s tested compression thresholds are roughly VIX 20d stdev ≤ 0.86
VVIX 20d stdev ≤ 3.16

Right now, we are seeing :

VIX stev at 0.79

https://preview.redd.it/t31buffbmo0h1.png?width=795&format=png&auto=webp&s=0641f2d1212256a52fdcb3a9542fd37a47226b1a

VVIX at 2.46

VVIX st dev

That is not a guarantee that VIX explodes tomorrow, but it does suggest the market is moving from a calm-vol regime toward a more fragile volatility regime.

On top of thism a normal relaxed market usually has a healthy contango structure.

When that curve starts flattening like rn while VIX and VVIX dispersion are already compressed, I view it as a warning that the “easy short-vol” environment may be weakening.

VIX Flattening

The silver market is projected to remain in structural deficit for a sixth consecutive year as 762 million troy ounces have been drawn from inventories since 2021 and the 2026 deficit is expected to widen to 46.3 million ounces.

These deficits are normally absorbed by above-ground stocks but once those stocks become thinner or less available, price becomes more sensitive to incremental demand.

At end-March 2026, London vaults held 884 million ounces of silver, but only 28% was not tied to exchange-traded products. 

That was an improvement from the September 2025 stress low of 17%, but still far below the estimated 65% available share at end-2019.

 In other words, the portion that is potentially available for market liquidity is much smaller.

https://preview.redd.it/hud4dyaqkh0h1.png?width=2048&format=png&auto=webp&s=da355ab6f9d367bd5764a79df8916a5659cb06d7

ETP demand can become reflexive

Buying an existing silver ETP share in the secondary market does not automatically remove new metal from the market, but when net inflows lead to new share creation, authorized participants must deliver physical silver into the trust.

This shifts metal from the potentially available pool into ETP custody.

Based on the end-March 2026 base of 884 million ounces in London vaults and 28% not tied to ETPs, the potentially available pool was roughly 248 million ounces.

Under a simple static-stock sensitivity, 100 million ounces of additional ETP metal demand sourced from London would reduce the available share to about 16.7%, below the September 2025 stress-low level of 17%.

Incremental ETP metal buying	Available London share
0 Moz	28.0%
50 Moz	22.3%
100 Moz	16.7%
150 Moz	11.0%
200 Moz	5.4%
~248 Moz	~0%

This table is not a forecast. It is a stress-case illustration of how quickly ETP inflows can tighten London liquidity if offsetting metal flows do not arrive. 

https://preview.redd.it/2qj8b8prkh0h1.png?width=2048&format=png&auto=webp&s=ee7cc64340c268880457f0dedcd4f7cc0e4e4bda

Institutional buying has picked up since May 6th

https://preview.redd.it/xw2lmb6skh0h1.png?width=783&format=png&auto=webp&s=60d1aae555e58f79e81ef173c3986208a39c945b

The optipns market positioning has already built up and targeting $80 as well as market makers are likely to provide support at $70.

https://preview.redd.it/f12lzoqskh0h1.png?width=682&format=png&auto=webp&s=050500653799b8f7e4cd1c7e27b540e5a16d57c9

Silver’s semiconductor and AI demand is increasing

Silver’s semiconductor exposure is concentrated in the most demanding parts of the chip value chain - backside metallisation, die attach, flip-chip and micro-bump interconnects, thermal-interface materials, lid attachment, image sensors, photonics and advanced packaging.

https://preview.redd.it/ed1ofdetkh0h1.png?width=686&format=png&auto=webp&s=02f237b782e1a6146862584cd839e66fe36f9281

In die attach silver epoxy, silver paste and sintered silver materials bond the die to the package while helping move heat away from high-power chips.

In flip-chip attach and micro-bumps, silver is used in tin-silver or tin-silver-copper solder systems such as SAC solder. These connections carry power and signals between the die and the package. As chiplets, 2.5D/3D packaging and AI systems increase interconnect density, even small amounts of silver per connection become more relevant because of the millions of bumps and packages.

SIlver is also used in the thermal-interface materials and lid attachment - to improve heat transfer. This is especially relevant for high-power GPUs, AI accelerators, RF devices and data-center processors.

Photonics adds another layer. Optical interconnects, transceivers, sensors and high-speed data links are becoming more important as AI data centers move more data between GPUs, memory, servers and racks. Silver’s role is not that every photonic component uses large amounts of metal, but that its conductivity, reflectivity and thermal properties make it relevant in contacts, coatings, sensors, conductive inks and optoelectronic packaging.

This demand is coming in an already tight physical market facing repeated deficits and limited available inventory.

With a revised an expected 46.3 Moz deficit in 2026 silver has remained in deficit for six consecutive years, steadily drawing down above-ground inventories and reducing the market’s buffer against investor-flow or industrial-demand shocks. 

https://preview.redd.it/iaapwsztkh0h1.png?width=989&format=png&auto=webp&s=305c899f603123f99a91ff48b250084b9c961eb5

We now have demand increase, ETF/ETP demand increase and positive positioning.

This will remain in play until SLV is above $65-70

The silver market is projected to remain in structural deficit for a sixth consecutive year as 762 million troy ounces have been drawn from inventories since 2021 and the 2026 deficit is expected to widen to 46.3 million ounces.

These deficits are normally absorbed by above-ground stocks but once those stocks become thinner or less available, price becomes more sensitive to incremental demand.

At end-March 2026, London vaults held 884 million ounces of silver, but only 28% was not tied to exchange-traded products. 

That was an improvement from the September 2025 stress low of 17%, but still far below the estimated 65% available share at end-2019.

 In other words, the portion that is potentially available for market liquidity is much smaller.

. London silver liquidity share, 2019–2026.  “available” means not tied to ETPs, not guaranteed deliverable supply.

ETP demand can become reflexive

Buying an existing silver ETP share in the secondary market does not automatically remove new metal from the market, but when net inflows lead to new share creation, authorized participants must deliver physical silver into the trust.

This shifts metal from the potentially available pool into ETP custody.

Based on the end-March 2026 base of 884 million ounces in London vaults and 28% not tied to ETPs, the potentially available pool was roughly 248 million ounces.

Under a simple static-stock sensitivity, 100 million ounces of additional ETP metal demand sourced from London would reduce the available share to about 16.7%, below the September 2025 stress-low level of 17%.

Incremental ETP metal buying	Available London share
0 Moz	28.0%
50 Moz	22.3%
100 Moz	16.7%
150 Moz	11.0%
200 Moz	5.4%
~248 Moz	~0%

This table is not a forecast. It is a stress-case illustration of how quickly ETP inflows can tighten London liquidity if offsetting metal flows do not arrive. 

ETP inflow sensitivity. Scenario assumes new ETP demand is met from London available stocks with no offsetting inflows.

Institutional buying has picked up since May 6th

https://preview.redd.it/vuek2b56kh0h1.png?width=783&format=png&auto=webp&s=1184f3683c248f068af3def39145a374d723d8d8

The optipns market positioning has already built up and targeting $80 as well as market makers are likely to provide support at $70.

https://preview.redd.it/773lvgn6kh0h1.png?width=682&format=png&auto=webp&s=51e186f20b2787b4e8f80b3408d6c2d14f180422

Silver’s semiconductor and AI demand is increasing

Silver’s semiconductor exposure is concentrated in the most demanding parts of the chip value chain - backside metallisation, die attach, flip-chip and micro-bump interconnects, thermal-interface materials, lid attachment, image sensors, photonics and advanced packaging.

https://preview.redd.it/bx5yc3xbkh0h1.png?width=686&format=png&auto=webp&s=552a62f469b700c7b192b7b21065a362e51acc9d

In die attach silver epoxy, silver paste and sintered silver materials bond the die to the package while helping move heat away from high-power chips.

In flip-chip attach and micro-bumps, silver is used in tin-silver or tin-silver-copper solder systems such as SAC solder. These connections carry power and signals between the die and the package. As chiplets, 2.5D/3D packaging and AI systems increase interconnect density, even small amounts of silver per connection become more relevant because of the millions of bumps and packages.

SIlver is also used in the thermal-interface materials and lid attachment - to improve heat transfer. This is especially relevant for high-power GPUs, AI accelerators, RF devices and data-center processors.

Photonics adds another layer. Optical interconnects, transceivers, sensors and high-speed data links are becoming more important as AI data centers move more data between GPUs, memory, servers and racks. Silver’s role is not that every photonic component uses large amounts of metal, but that its conductivity, reflectivity and thermal properties make it relevant in contacts, coatings, sensors, conductive inks and optoelectronic packaging.

This demand is coming in an already tight physical market facing repeated deficits and limited available inventory.

With a revised an expected 46.3 Moz deficit in 2026 silver has remained in deficit for six consecutive years, steadily drawing down above-ground inventories and reducing the market’s buffer against investor-flow or industrial-demand shocks. 

Shortage indicators: inventory drawdown since 2021 and forecast 2026 market deficit.

We now have demand increase, ETF/ETP demand increase and positive positioning.

This will remain in play until SLV is above $65-70

https://preview.redd.it/3kdsnqs9xgzg1.png?width=766&format=png&auto=webp&s=7a7eddb0b1cfd696159ae2ccf72256d41b72a985

One of the biggest bullish AMD trades we posted a couple of days ago hit on May 1. The bearish follow-up looked like a hedge, and AMD is now up 17%.