At year’s end, gold bugs were pretty happy. They had every right to be. Bullion, proxied by the SPDR Gold Shares ETF (NYSE Arca: GLD), gained more than 18 percent over the past year. Gold mining stocks did even better. The VanEck Vectors Gold Miners ETF (NYSE Arca: GDX), a tracker of nearly four dozen large metal producers, was up nearly 43 percent. Smaller mining outfits, like those populating the VanEck Vectors Junior Gold Miners ETF (NYSE Arca: GDXJ), edged out the bigger firms with a collective return of better than 44 percent.

We can’t talk about junior miners, though, without paying attention to those companies that focus on finding silver. Now, those guys made some gains. Cases in point: the three dozen inside the ETFMG Prime Junior Silver Miners ETF (NYSE Arca: SILJ).  SILJ soared nearly 55 percent in 2019.

Junior Miners: Silver vs. Gold

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SILJ’s portfolio tracks a diverse universe of small-cap mining and exploration companies, overweighting the pure plays and underweighting all others. The $140 million fund costs 69 basis points to hold and trades an average of 342,000 shares daily.

No doubt, the fund’s got mojo. That’s both good and not so good. Technically, the fund has reached a bullish price objective on its weekly chart but still has upside potential on the daily graph. How much upside? SILJ now trades at the $12.50 level. Figure another $2.50—about 20 percent—to satisfy the techies.

But here’s the not-so-good thing: The ETF is approaching overbought territory. So, how to play SILJ from here? Go to that old standby, the covered call.

The August $15 call, when written against a round lot purchase of the underlying ETF, offers a modicum of downside protection while setting up a forced sale of the shares if that $15 daily chart objective is attained. Being thus lifted out of the SILJ position results in a nearly 28 percent return, a better deal than a naked purchase of the ETF shares.

So, between a covered call and an outright ETF purchase, which is better? For silver fans and momentum believers, the lower breakeven of the SILJ buy-and-write is pretty compelling.