Position Disclosure
On February 24, 2026, DamonSkye Research entered 3x AG March 20 $36 call options at $0.80 per contract. Total outlay: $240, classified as research expense and proof of concept. As of today's close the position is marked at $1.41, a gain of 76.25% in three trading days. This position is held open. Everything written below was the thesis before the trade. The timestamp is public. The receipts exist.
▲ 76.25%  ·  $0.80 → $1.41  ·  Position Open
THE CATALYST

Today is First Notice Day for March 2026 COMEX silver futures — the official opening of the delivery window. The data is not subtle.

10,526 contracts · 52.63M oz standing for March delivery
86.13M oz registered COMEX inventory
74.38M oz delivered Jan–Feb combined · 86.4% of registered stock in 60 days
Managed money: 54,415 contracts (Feb 2025) → 12,121 (Feb 2026) · −77.72% YoY

On February 26, COMEX halted metals trading. During that halt, volume data shows 31,828 contracts traded. When trading resumed, silver was slammed from $91 down to $84.98 in a coordinated three-wave sell-off. March open interest was cut by over 50% in a single session. The CME reduced the delivery threat. The question the market is answering: what does it mean that they had to?

February delivered 5,036 contracts — 25.18 million ounces — the highest February delivery in modern COMEX history. Combined with January, the exchange delivered 74.38 million ounces in 60 days — 86.4% of current registered inventory. Managed money contracts dropped from 54,415 in February 2025 to 12,121 today. The demand is not speculative. It is industrial and institutional users taking physical metal.

Silver closed today at $93.46, up sharply on First Notice Day itself. By evening the spot price reached $94.50.

THE MISUNDERSTANDING

The financial media is covering this as a COMEX default story. That framing misses the actual investment thesis.

A formal COMEX default is a tail risk. The exchange has every mechanism to prevent it: EFP cash-outs, eligible-to-registered reclassification, margin hikes, and — as demonstrated yesterday — halting the market. They have already used these tools. They will use them again.

The real thesis is not default. The real thesis is structural repricing.

Five consecutive years of supply deficit totaling 820 million ounces. COMEX registered inventory down 64.1% since April 2020 — from 240 million ounces to 86.13 million ounces. Shanghai Gold Exchange inventory down 43% since November 2025. The US Mint suspended silver numismatic product sales in January. Physical silver premiums are running $4 to $6 per ounce over spot versus a historical average of $1 to $2. China has restricted silver exports, classifying silver as a strategic national security asset.

These conditions do not resolve in a month. These conditions reprice an asset class.

WHY FIRST MAJESTIC

First Majestic is the highest-leverage pure-play expression of this thesis for three reasons that most market models are not pricing.

First, no hedges. AG sells into spot. Q1 2026 realized prices will reflect actual market silver — currently tracking $93 to $95 per ounce — against analyst models built on $55 to $60 silver. The Q1 earnings report drops May 13. Blended realized prices of $93 to $95 per ounce could generate $0.45 to $0.60 EPS against consensus estimates that have not caught up.

Second, First Mint. AG's 100%-owned retail bullion operation in Nevada is selling at $100.81 per ounce — a $6.31 premium over spot. Q4 2025 earnings confirmed the mint generated $24 million in profitability. At $94 spot and $100.81 retail, that margin expands with every dollar silver moves. This revenue stream does not appear in traditional silver miner valuation models.

Third, $940 million cash. AG entered this environment with a fortress balance sheet, zero hedges, 31.1 million silver equivalent ounces of annual production, and an operation positioned to acquire distressed silver assets as smaller producers get squeezed.

AG closed today at $31.31, touching an intraday high of $31.88 — a new all-time high. H.C. Wainwright's price target of $30, raised five days ago, is already behind the stock. The 52-week range was $5.09 to $31.88.

THE STRATEGY

The March 20 $36 calls are a bet on continued price expansion through the delivery month. If AG reaches $36 at expiration the calls are worth $6 each — a 650% return on the $0.80 entry.

The thesis plays out in three phases. Phase one is the March delivery window — watching how many contracts stand, how the CME responds, and whether the managed-money collapse in speculative positioning reverses. Phase two is the May 13 Q1 earnings report — where blended realized silver prices of $93 to $95 per ounce hit models built on $55 to $60. Phase three is the full-year thesis — a silver market repricing driven by industrial demand against a mining sector that cannot increase production fast enough to close a deficit five years in the making.

DamonSkye Research will publish weekly updates through March 20 marking the position to market, tracking delivery data, and reporting on AG price action. The March 20 resolution piece will include the full trade history, prior report quotes with publication dates, the result, and a forward look at round two.

Delbert's Take
“When everyone's fighting over the paper receipt for the grain, find the man who actually has the grain.”
The author holds 3x AG March 20 $36 call options entered February 24, 2026 at $0.80 per contract. Current mark: $1.41. The author may hold positions in securities discussed in this publication. All positions, if any, will be consistent with the analytical thesis presented. DamonSkye Research discloses material holdings at the time of publication. This is not investment advice. See full disclaimer.