February 11, 2026 | The Silver ‘Great Divorce’: Is the COMEX About to Break?

Silver: A Setup That Often Precedes Potentially Severe  Corrections

There is a lot of noise right now surrounding the physical availability of silver, and it’s creating uncertainty for investors in both the futures and ETF markets. The silver market is entering a period where price behavior may be driven less by fundamentals and more by market structure. When that happens, moves can be fast, sharp, and counter-intuitive.

Right now, conditions are developing that have historically preceded abrupt corrections—even in markets that remain bullish over the longer term.

Too Much Paper, Too Little Ready Metal

As we approach the March delivery window, the amount of silver represented by futures contracts is extremely large relative to the amount of metal that is immediately deliverable.

There are currently contracts representing roughly 380–455 million ounces of silver tied to the March futures month. Against that, COMEX registered inventories—metal ready for delivery—are near 100 million ounces.

This imbalance, by itself, is not unusual. Futures markets always operate on leverage, and most contracts are never settled with physical metal. The system works smoothly as long as most traders roll forward or close positions.

The risk emerges when too many participants begin thinking about delivery at the same time—or when the exchange acts to reduce risk in the system.

The Calendar Matters

February 27 (First Notice Day) is the key date. By then, traders holding March contracts must decide whether to roll forward, close out, or stand for delivery.

In most months, this passes quietly. But when positioning is crowded and sentiment is one-sided, the approach of First Notice Day often becomes a pressure point. Traders who are late to exit can be forced to move all at once.

If delivery demand appears likely to strain inventories, the exchange does not wait for failure. It intervenes.

How These Episodes Usually End

When stress builds, the playbook is familiar:

• Margin requirements rise
• Leverage is reduced
• Speculative longs are forced to liquidate

This is not a judgment on silver’s long-term value. It is simply how futures markets preserve stability. Unfortunately for leveraged participants, these actions tend to trigger sharp price declines, even when physical supply remains tight.

We saw this clearly in 2011, when repeated margin hikes preceded a violent correction. Fundamentals did not change—positioning did.

What We’re Watching Now

Several red flags are aligned:

• Crowded long positioning
• A large nearby delivery month
• Tight registered inventories
• A fixed, known catalyst in late February

That combination increases the odds of a flush, not a smooth adjustment.

Strategy: Risk First, Opportunity Later

This is not the environment to press leverage. Volatility can expand suddenly, and markets under structural stress often move far more than expected.

For investors, the priority is clear:

• Protect capital
• Reduce exposure to forced selling risk
• Be patient

Corrections driven by positioning tend to create opportunity—but only after the liquidation phase has run its course. Our focus is on surviving the shakeout so we can act when the risk-reward turns decisively back in our favour.

Stay tuned!

Martin Straith February 11th, 2026

Posted In: The Trend Letter

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