The sharpest rallies are propelled by the blood of those shooting against them. Whether it’s the Internet, housing or RCA in 1928, buyers in the waning stages of a bubble are equal parts latecomers chasing the party and shorts being forced to capitulate by covering. As being “early” is exactly the same as being “wrong” in the trading world, ours is not to say whether it’s the chasers or burned shorts that are the dumber money. But the battle lines are being drawn.

Which brings us to the commodity rally still in full swing. In the past two years silver is up from a 12-handle to new all-time highs over $40 oz. Goldman Sachs (NYSE:GS) and all the other cool kids are looking for a sharp pullback. Of course there is a not-at-all fine distinction between taking profits and putting your money on a short side bet. One trader this week made just that bet by wagering $1 million on July (NYSE:SLV) puts over 35% out of the money.

BREAKOUT brought in Interactive Brokers’ Senior Market Analyst Andrew Wilkinson to help us make sense of the put position. See the full interview below:

NYSE:AGQ, NYSE:DBS, NYSE:SIL, NYSE:SIVR, NYSE:SLV, NYSE:USV, NYSE:ZSL