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« Silver Wheaton Corporation $15.00 Call Options Closed with 106% Profit | Main | Silver Standard Reports 4th Quarter and Year-End 2009 Results »

Silver Wheaton Corporation Call Options Up 54.20%

SLW Chart 26 April 2010.jpg

On the 11th February 2010 we purchased Call Options on Silver Wheaton Corporation (SLW) when we wrote:

Just a quick note to let you know that in todays trading session in NYC we bought some Call Options on Silver Wheaton Corporation (SLW) and they are the JUNE 2010 series at a strike price of $15.00 and $16.00, for which we paid a price of $2.02 and $1.60 respectively per contract.

As of Friday they closed in NYC at $2.94 and $2.30 up 54.20% and 42.76% respectively.

As we can see from the above chart SLW started well and then flattened out slightly so it looked as though we were in a little too early for this move, however, we are now heading north once again. We noted the three higher lows along with three higher highs previously and now we can see that both the 50dma and the 200dma are moving up in a parallel formation which is also positive for the stock.

Everything depends on silver as usual, however, both silver and gold prices have stood up well during the dollars rally and at some point down the line they will decouple from the dollar and head north regardless of what the dollar the does.

Options are not for the faint hearted so go very gently with them.

Just to re-cap we suggested acquiring this stock when we posted an article on the 11th February 2010, entitled: Silver Wheaton Corporation: Buy This Dip, when SLW stood at $14.38, today it stands at $18.01, up 25% in just over two months and hopefully there is more to come.

Silver Wheaton Corporation trades on the New York Stock Exchange and the Toronto Stock Exchange under the symbol of SLW and is currently trading at $18.01.

The Company has a market capitalization of $6.17 billion, with 342.54 million shares outstanding, a 52 week trading range of $7.12 to $17.80 with an average volume of 5-6 million shares traded.

As a suggestion for those who do want leverage to the precious metals bull, the gold and silver funds together with the careful application of options trades could be a possible solution for you. This way we are exposed to any movement in gold prices which in turn is magnified by the effect of the option. Do remember that loses are also magnified in the same way so its not a strategy for the faint hearted. On the other hand the quality stocks are not performing as anticipated and a non-producing junior stock is a shot in the dark, however, its your money and its your call.

Got a comment then please add it to this article, all opinions are welcome and appreciated.

If you would like to get a bit more bang out of your buck, then check out our Options Trading Service please click here.

For the analysis of a recent options trade that we have just closed please click this link.

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