Silver’s 65% Plunge: How Algos and Margin Calls Turned a Quiet Friday Into a Bloodbath

If you ever needed a reminder that commodities can be just as wild as crypto, look no further than last Friday’s silver market. In a single, breathtaking session, the AGQ ETF—a leveraged play on silver—plunged 65%. This wasn’t your garden-variety selloff. This was a full-scale algorithmic liquidation, the kind of move that makes even the most hardened traders check their margin balances twice before lunch.

The facts are as ugly as they sound. According to Seeking Alpha, the AGQ ETF collapsed 65% in one day, dragging silver and precious metals lower across the board. This wasn’t about fundamentals. There was no sudden glut of supply, no surprise from the Fed, no new war in the Middle East. This was a mechanical, systemic event—algos tripping over each other as margin calls cascaded through the system. Gold and stocks weren’t spared either, with both selling off in sympathy. The Big Friday Liquidation, as it’s already being called, wiped out weeks of gains and left traders scrambling to reassess their risk.

Context is everything. Silver has always been a volatile asset, but this kind of move is rare even by its standards. The AGQ ETF is a double-leveraged product, designed to amplify silver’s daily returns. When things go wrong, they go wrong fast. The broader commodities complex has been under pressure for weeks, with DBC (the broad commodities ETF) flatlining at $24.45. The macro backdrop is also shifting, with Treasury issuance draining liquidity and risk assets across the board feeling the pinch. The correlation between commodities and equities has been rising, as both asset classes respond to the same macro drivers. When liquidity tightens, everything gets hit.

But let’s call this what it was: an algorithmic accident waiting to happen. The proliferation of leveraged ETFs and systematic trading strategies has made the market more fragile, not less. When volatility spikes, these products can become self-reinforcing feedback loops, driving prices lower in a hurry. The AGQ wipeout is a case study in how modern market structure can turn a routine selloff into a rout. Margin calls beget more margin calls, and human traders are left watching helplessly as the machines do their thing. This isn’t about silver’s fundamentals. It’s about market plumbing and the risks of leverage in an increasingly automated world.

Strykr Watch

Technically, silver is now in no-man’s land. The AGQ ETF’s collapse has left a gaping hole on the chart, with no obvious support until much lower levels. Spot silver is struggling to find a bid, and gold isn’t faring much better. The DBC ETF remains stuck at $24.45, offering little comfort to commodity bulls. RSI and momentum indicators are deeply oversold, but that’s cold comfort in a market where liquidity has vanished. Watch for stabilization in AGQ and spot silver before considering any long positions. The next support for silver is at the $20 level, with resistance at $24. Gold needs to reclaim $2,000 to signal a reversal.

The risks are clear. Another round of forced selling could push silver and gold even lower, especially if equities remain under pressure and liquidity continues to tighten. The proliferation of leveraged products means that volatility could remain elevated for some time. Macro risks, including Treasury issuance and a potential hawkish surprise from the Fed, add another layer of uncertainty. And then there’s the risk that other commodities or ETFs could be caught in the crossfire if volatility spikes again.

Opportunities exist for those willing to embrace volatility. Mean reversion trades in silver and gold could pay off if the market stabilizes, but tight stops are essential. Shorting leveraged ETFs after a major liquidation is risky, but could work if volatility remains high. For the bold, options strategies that benefit from elevated implied volatility are worth a look. For everyone else, patience is a virtue. Let the dust settle before jumping back in.

Strykr Take

The AGQ wipeout is a wake-up call for anyone who thinks leverage is a free lunch. The market structure is more fragile than it looks, and when things go wrong, they go wrong fast. Stay nimble, manage your risk, and don’t trust the machines to stop themselves. There will be opportunities on the other side of this, but only for those who survive the storm.