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« Endeavour Silver Corporation: On Track to Beat Production Forecast | Main | Silver prices trending upwards »

Silver Wheaton Corporation Call Options Update 06 October 2010

slw logo.JPG

Just a quick note to update you on our position regarding the purchase of Silver Wheaton Corporation (SLW) Call Options which we acquired on the 8th September 2010, covered in our post entitled Silver Prices: Dare to Dream.

The ‘fall’ season continues with both silver and gold prices setting the pace start with gold prices climbing to record highs and standing at around $1340.00/oz, and silver prices standing at $22.87/oz, a new recent high as we write.

Gold prices, having broken through their resistance level recently pushed ahead into uncharted waters with no overhead resistance ahead of them, so they could go a lot higher and do so in a short time frame, which is just what we want. Silver prices have also sprung into life and todays gain of around $1.00/oz shows that there were some serious buyers out there today.

We have also said in the past that silver prices will outperform gold prices before this bull market ends and in terms of percentage gains if we look closely we can see that over the short term this is starting to happen.

As you are probably aware we revamped our strategy recently by reducing our holdings in some of our gold and silver producers in order to buy more of SLW stock and have some cash available for options trades as we identify them. The objective being to boost our financial position as we have been doing with this stock, with gains of 103%, 106% and more recently 79%.

We acquired more SLW stock on 9th August 2010, for an average cost of $19.76 per share, which appeared a tad expensive at the time, however, they now stand at $27.04 giving us a paper profit of 36.77% in a little over a month.

At the moment we utilize the recommendations as stated in our premium options trading service to boost our returns along with the occasional trade being posted on this site.

So, on the 8th September we took the plunge and acquired a spread of Call Options on our favourite stock, SLW, with the following purchases.

December 2010 $26.00 Calls @ $1.55, now at $2.72 for a gain of 73.95%
December 2010 $30.00 Calls @ $0.58, now at $1.03 for a gain of 73.70%
December 2010 $35.00 Calls @ $0.18, now at $0.26 for a gain of 34.90%
January 2011 $26.00 Calls @ $2.00, now at $3.18 for a gain of 57.92%
January 2011 $27.00 Calls @ $1.64, now at $2.64 for a gain of 59.65%

Finally make sure that you have positioned yourself to take advantage of what we think will be a good rally in both gold and silver prices, right up to January 2011, with a possible dip around mid October, but not if the shorters throw the towel in, which they appear to be doing, if todays action is anything to go by.

Silver Wheaton Corporation trades on the New York Stock Exchange and the Toronto Stock Exchange under the symbol of SLW.

The Company has a market capitalization of $9.30 billion, with 344.00 million shares outstanding, a 52 week trading range of $11.86 to $27.92 with an average volume of 6-7 million shares traded, although spikes in trading have seen 14 million shares change hands.

Talking of profits, over in our options trading den they closed a trade last night with a profit of 82% which follows their recent success of closing a trade which generated a profit of 50% in 30 days on GLD Call Options, so they now need update their progress chart, yet again, which will probably be done this weekend as things are a little hectic at the moment. However, to see exactly how it is going, please click this link.

OptionTrader Profits

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.

On Friday, 27th August 2010, we closed another successful trade banking a profit of 79.46% on Call Options on Silver Wheaton.

The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09. On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days, with more positions opened yesterday. Drop by and take a look.

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

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Reader Comments (4)

well what happen today,Silver $ 23.05 and SLW in red?
Team guys from where you declared "todays gain of SILVER around $1.00/oz shows that there were some Serious buyers out there today? (still lower volume than Feb/May/10).
We had much higher quant.easing in Sept/22th/2008 and silver within a month slammed to $8. We had much higher quant.easing in May/10 from European Union and Silver price had correction from $19.5 to $17.5.
Did you see market crash on May/06th/10? (DOW -1000 points).
How you are so much possitive that Silver price will going $30/oz and lets say why is natural gas price for Nov/Dec between $3.7 to $3.9/bbl when in June was $5.5.
When 95% of world population don't buy Gold and Silver bars but 99% population use nat.gas much more in winnter?
Or the market is more related with political(banksters) issue because of the world largest exporters of Nat. gas are Iran and Russia.
Or soon we'll have Golden/Silver standards of the currencies, but those stories were the same when $ US was much much lower in the worst possition in the last 50 years with 70 index value in March/2008.(Today $US index is 78).
Or because of Bernake stories of quant.easing in Nov/2010, do you realy beleiving to him. In March/2008 he declared that USA is not in recession and what happen till March/2009?
Lets say that next 2 months SLW just bouncing between $26 and $27. So how much will be your option? Even if SLW will going $28 on Dec/18th/2010 your options will have much less value than today.OK
Did you ever had options trades between Sept/08 to March/09 with intraday volatility of thousands stocks between 10% to 30%?
WHy do you think that SLV and GLD price will going to the roof, and will you hold your possitions of SLW till expiration Dec/10?

October 6, 2010 | Unregistered CommenterMike SR

Team Guys I love your declaration of $30 silver price or more! It's remined me from Goldman Sucks delaration in July/2008 that Oil will hit $200 till december/2010.
(from $147 slammed to $32).
Or Bernake declaration in March/2008 that no recession in USA is possible. (silver price in march/08 $21 to Nov/08 just $8.
Or I love stories gold should going higher over $2000/0z adjusted with inflation? WHAT INFLATION?
I had salary $ 2,600-net, in Oct/2001 when gold was $260/0z, and if we adjust with inflation and current gold price I should have salary today $13,500-net, but I got $3,990. And I have double more taxes,food prices,fuel,etc. and I have less purchasing power than 2001. OK
I have many relatives in Europe and situation is even worst than USA, when 90% of people lost living standards from 2001 but Gold/Silver going up, and Natural gas $2-$3?
Are you OK, with your bets? Or you are guys,or in 2008 big oil guys, now converted like silver/gold bugs?

October 6, 2010 | Unregistered CommenterMike SR

Well,from Sept/24th till today SLW still can't hold $27 and silver price gained from $21.20 to $23.53 (+10%).

14 days in future options market is at least 10% less price.
You should be Active traders, Sell and buy cheaper if you are so much possitive.

October 7, 2010 | Unregistered CommenterMike SR

We are positive and that is why we have not sold. Todays dip is a healthy one and we still expect silver prices to trek north as the year end approaches.

October 7, 2010 | Unregistered CommenterSilver Prices

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