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« Silver Eagle coin sales shaping up for record in November 2010 | Main | Portfolio Update 30 November 2010 »

Silver Wheaton Corporation Call Options Up 59.88% since November 8th, 2010

slw logo.JPG

A quick update for those who have followed us into this trade by acquiring the same Silver Wheaton Corporation (SLW) Call Options which are the March 2011 contracts at a strike price of $35.00 for which we paid an average price $3.31 per contract. These contracts were ‘out of the money’ at the time of purchase, November 8th, 2010, the price paid was all time premium.

Fast forward to today's action on the NYSE and we have SLW closing at $36.89, which places these contracts ‘in the money’ as the time premium is $3.44 now and the intrinsic value is $1.89, as they closed at $5.30, registering a gain of 59.88% in twenty odd days.

This move upwards was of course on the back of silver prices which increased $28.09, for a gain of $0.98 or 3.5%. Its pleasing to see silver prices close above $28.00 which is regarded by many as resistance level so lets hope silver can dig in and move higher from here. Not too high though, we would prefer not to have spikes, a slow steady rise would be good. However, if we do get a spike it could well be an opportunity to take some profits off the table especially out of an options trade.

If you wish to take profits at this point then who could blame you, its a good profit and in a short time period too. However, for what it is worth, in our humble opinion, there could be more to come and they don't expire until March 2011. So, in conclusion we will hold for now.
Scanning the air waves we have the following revised price targets for SLW:

Silver Wheaton Target Raised To $42 From $40 By Scotia
Silver Wheaton Target Raised To $36 From $28.50 By GMP
Silver Wheaton Target Raised To $35 From $29.50 By UBS
Silver Wheaton Target Raised To $46 From $40 By BMO

(Equities research analysts at BMO Capital upgraded shares of Silver Wheaton (NYSE: SLW) from a “market perform” Rating to an “outperform” rating in a research note to investors on Friday, with a price target of $46.00.)

Silver-Prices.Net Target Unchanged at $100.00

So there you have it.

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 $12.78 billion, with 346.56 million shares outstanding, a 52 week trading range of $13.04 to $37.26 with an average volume of 10-11 million shares traded, although spikes in trading have seen 14 million shares change hands.

Meanwhile back at the ranch during our knockabout sessions we have toyed with the idea of running an Accumulator whereby we make a trade and then use the total proceeds for the next trade and so on. So the stake and any profits are rolled into the next move, if you would like to comment on this idea, then please click here. We hope to start this shortly, just need the right trade, not always easy as we all know.

Over in the options trading pit the team have updated the progress chart to include closed trades, now 53 winners and out of 55 trades, having been stopped out of a trade with a profit of 41.84% made in just 8 days. We currently have a number of open positions which we are pleased to say are all in positive territory.

sk chart 19 Nov 2010.JPG

The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today?

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.

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Reader Comments (1)

These contracts are up again today, closing at $5.85, so we now have a paper profit of 76%. SLW hit a new all time high today so there could be more to come as silver prices continue to make ground.

Keep smiling you're a silver bug.

December 1, 2010 | Unregistered CommenterSilver Prices

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