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« Silver Wheaton Corporation $16.00 Call Options Closed with 103% Profit | Main | Silver Wheaton Corporation Call Options Up 54.20% »
Thursday
Apr292010

Silver Wheaton Corporation $15.00 Call Options Closed with 106% Profit

SLW Chart 30 April 2010.jpg


We are pleased to report that in todays trading session we sold our tranche of the JUNE 2010 series, $15.00 Call Options, on Silver Wheaton Corporation (SLW) for an average of $4.16 having paid a price of $2.02 per contract on 11th February 2010.

Taking a quick look at the above chart we can see that SLW has put in a good run over the last week or so, pushing our Call Options up by more than 100%, on the back of silver prices which gained around $0.40 in todays trading session. Also note that the RSI has popped up above the '70' level to hit 76.73, which suggests that the stock is now overbought. We had considered the use of a trailing stop, but they are not guaranteed and a drop in prices in overseas markets could see the stock price open a lot lower than the stop price, which is then negated and we would get the market price. So rightly or wrongly we decided to take the cash and retire to the sidelines for now.

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 $19.32, up 34% 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 $19.32.
The Company has a market capitalization of $6.59 billion, with 342.54 million shares outstanding, a 52 week trading range of $7.12 to $19.33 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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Reader Comments (7)

did you also sell your stock?

April 30, 2010 | Unregistered Commentergary

Well done. I seem to recall a chorus of warnings and dire predictions around your SLW positions. Silver absolutely couldn't possibly go above certain price levels and would crash soon...SLW was a silver "reseller" (whatever that might be)and was vulnerable...SLW was inefficiently managed, because they have more staff than Franco had, etc.

Yeah, well, you made money on the trade.

I didn't play the options. Just have the stock and I sold too much off via covered calls at lower prices. I'll have to follow your lead more closely.

I still worry about Credit Revulsion Part Deux arriving unannounced and smacking things down. I may be fighting the last war, but I'd rather be a little safer than really sorry, especially given what I see as the extremely precarious position of the world's currencies, financial markets, and governments at this point. I've been wrong to be timid so far, but I stay concerned and cautious.

Again...Bravo. Good call.

April 30, 2010 | Unregistered Commenterfallingman

I like the Sprite in you. LOL!!!!!!!!!!

April 30, 2010 | Unregistered CommenterJerrold Minyard

Hehehe, just put a short on silver today at close. Could be the last high before going to 12. Equities are going to drag everything down next week.

April 30, 2010 | Unregistered CommenterDi

Di,

Jeez, you're persistent. I'll give you that. But unless you're some kind of masochist, I don't understand the Hehehe. How well have those previous shorts worked out?

You're right, it could be "the last high before going to 12." And then again, it might not be. It might be just getting started on the upside. Just curious...at what price would you conclude your thesis was incorrect and change strategy? Is there one?

April 30, 2010 | Unregistered Commenterfallingman

Maybe the financials will take the market down followed by the equities. I have been short for awhile. I have been holding shorts for close to a year.

April 30, 2010 | Unregistered CommenterJerrold Minyard

gary,

No, we did not sell the stock, SLW is our largest holding at the moment, but more by luck than good judgement.

April 30, 2010 | Unregistered CommenterSilver Prices

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