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« Silver prices take a break | Main | Eagle Plains Resources Limited: Up 100% in Two Days »

Silver Wheaton Corporation Call Options Up 105% since November 8th, 2010

In today's session in NYC we sold half of our position for $6.85 per contract effectively taking our cash off the table and retaining 50% of this position for free. These are the 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 trading at $39.20, which places these contracts ‘in the money’ as the time premium is now $2.54 and the intrinsic value is $4.36, or thereabouts, currently trading at $6.85, registering a gain of 105% in less than one month.

We now have until March before the remaining contracts expire so we will monitor them accordingly, as a spike in silver prices may just present us with an opportunity to sell a few more for a reasonable profit.

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.) 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 $13.62 billion, with 346.56 million shares outstanding, a 52 week trading range of $13.04 to $39.50 with an average volume of 10-11 million shares traded, although spikes in trading have seen 14 million shares change hands.

Just a gentle reminder for those who have purchased the warrants, they are coming up for expiry as this recent note from SLW states:

Silver Wheaton Corp. ("Silver Wheaton" or the "Company") (TSX, NYSE:SLW) advises holders of the Series "B" common share purchase warrants (TSX:SLW.WT.B) (the "Warrants") that the deadline for exercising the Warrants is December 22, 2010. Warrant holders are entitled to receive one share of Silver Wheaton upon exercise of one Warrant and payment of the exercise price of C$10.00 prior to their expiry.

If you purchased these warrants, do drop us a line and let us know how it worked out for you, we're sure that our readership would also be interested as we have not participated in this area as yet.

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.

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? We are now considering capping the membership, so move now if you don't want to miss out.

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 (2)


You wanted to hear from folks who bought SLW warrants. I didn't go for the "B" warrants, didn't think there was enough time left on them. I bought the "U" warrants (expire Sept 5, 2013) - SLVWF - in January, at an average price of $6.05. Closed yesterday at $24.80.

But have a look at the Dundee Precious Metals warrants. Bought both in January:

DNPMF (expires June 29, 2012) @ $0.1465. Closed Friday $1.78
DNPWF (expires Nov 20, 2015) @ $1.4045. Closed Friday $6.389

I own quite a few different warrants but I think the markets are getting so volatile that you must be into options as well. That's why I signed up last week.

However, onto the really important question - who will win the next rugby world cup?


Pete Rogers

December 4, 2010 | Unregistered CommenterPete Rogers


Thanks for the update, you have done very well indeed, well done. We haven't devoted enough time to warrants to recommend any particular company so its really useful when someone such as your good self can pop up from time to time and enlighten us.

My sporting days were focused on a proper game - y'know the one with the round ball, however, my sons play the pointy ball game and I watch!

The All Blacks should win it, however, they could peak too soon!!!!! and so the England team will sail away with the cup.....


Bob K

December 4, 2010 | Unregistered CommenterSilver Prices

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