Apologies if this reads similar to yesterdays article but we are pleased to report that we have sold the second tranche of the JUNE 2010 series, which are the $16.00 Call Options, on Silver Wheaton Corporation (SLW) for an average of $3.35 having paid a price of $1.16 per contract on 11th February 2010. So, we finish the week with not one, but two winners both returning just over 100% in a little over two months.
We wont bore you with the chart again, however, we would reiterate that SLW has put in a good run over the last week or so, gaining another $0.29 yesterday pushing our Call Options up by more than 100%, on the back of silver prices which gained around $0.21 in yesterdays trading session. Also note that the RSI has popped up above the ‘70′ level to hit 78.39, 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.
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 $19.52, up 35.7% in just over two months.
Now, if you bought the stock instead of the Call Options, 35.7% in just over two months isn't too shabby so you might want to take some profits off the table.
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 $19.52.
The Company has a market capitalization of $6.69 billion, with 342.54 million shares outstanding, a 52 week trading range of $7.12 to $19.83 with an average volume of 5-6 million shares traded.
Finally, at least half of you do not subscribe to the gold prices letter which often covers gold, oil, the dollar, currencies, politics, economics and silver, etc, which might be useful to you as you formulate your own investment strategy. You can always ignore articles on a particular gold producer but the other articles might help, and it will cost you nothing, so please give it a thought.
Got a comment then please add it to this article, all opinions are welcome and
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.
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.
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.
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.