Silver’s Meteoric Rise: Navigating the Leveraged ETF Opportunity

Precious metals are staging an impressive rally as 2025 draws to a close, with silver capturing significant market attention. The combination of anticipated resolution to the U.S. government shutdown and expectations for Federal Reserve interest rate cuts has propelled prices upward. Silver achieved a remarkable 4% single-day surge on November 12, building on its already impressive 66% year-to-date gain. The metal recently reached an unprecedented peak of $54.48 on October 17, marking its fifth consecutive structural supply deficit.

For investors seeking amplified exposure to silver's movements, the ProShares Ultra Silver ETF (AGQ) presents an intriguing proposition. This fund aims to deliver twice the daily performance of the Bloomberg Silver Subindex through futures contracts and swap agreements rather than physical metal ownership. The portfolio shows significant concentration, with Silver Future Dec 25 comprising 47.67% of holdings, followed by swap arrangements with major financial institutions.

This structured approach magnifies both profit potential and loss exposure. Investors should note that the fund's daily rebalancing can create performance deviations over extended periods, meaning returns rarely match exactly double the underlying index's movement over time. While suitable for short-term trading strategies, this characteristic makes AGQ potentially hazardous for buy-and-hold approaches.

Spectacular Returns and Market Accessibility

AGQ's performance metrics command attention: the fund has delivered 21.13% weekly returns, an 80.20% three-month gain, and an extraordinary 185.48% advance since January. Market liquidity remains robust, with nearly 3 million shares changing hands on November 13 and consistent average daily volumes between 2.9-3.3 million shares in recent months, ensuring smooth entry and exit for traders.

Should investors sell immediately? Or is it worth buying ProShares Ultra Silver?

Substantial capital inflows underscore growing investor interest, with $133 million entering the fund over five days and $376 million within three months. The ETF currently trades at $96.12, slightly below its net asset value of $96.83, potentially offering a minor entry advantage.

Contrasting Investment Approaches in Silver ETFs

The landscape for silver-focused exchange-traded funds reveals fundamentally different strategies. While competitors like iShares Silver Trust (SLV) and abrdn Physical Silver Shares ETF (SIVR) maintain physical silver reserves, AGQ employs derivative instruments to achieve leveraged exposure. This distinction presents investors with a clear choice between stable value tracking and maximized volatility potential.

The U.S. government's recent classification of silver as a critical mineral further strengthens the metal's fundamental demand outlook. Given the persistent supply deficits and favorable macroeconomic conditions, silver's upward trajectory could maintain momentum. However, leveraged instruments inherently work both ways—current gains could rapidly reverse if market conditions shift.