Silver Wheaton Corporation Call Options Update 05 July 2010
Sunday, July 4, 2010 at 10:31PM
Silver Prices in Silver Mining Companies
Silver Chart 05 July 2010.jpg

We kick off with a quick look at the metal itself where we can see that Silver prices came close to taking tea with the 200dma on Friday following a couple of down days. Hopefully the sell off is now over. The technical indicators have almost unwound suggesting the slide in prices is now over. Watch for the black line on the STO turning up, as a short term indicator this will give us a clue that silver has stopped sliding and is about to head higher.

Gold prices were hammered on Thursday, however, they did bounce back on Friday by about $12.70. We have seen this pattern over and over again, a sharp down turn in prices followed by a steady climb as it has been all the way from the $400/oz.

So, with the expectation that silver prices are about to move higher we took a look at silver Wheaton which had been sold off fairly aggressively and decided to increase our exposure to this stock by acquiring more Call Options. As you know on the 29th May 2010 we purchased some Silver Wheaton Corporation (SLW) Call Options which are the September 2010 series, with a strike price of $21.00 and we paid $1.30 per contract for them. On Friday we decided to advantage of this dip so we doubled our position for a cost of $0.95, reducing our average price to $1.12. As they say, fortune favours the brave, so its fingers crossed for us, while you guys can have a chuckle watching us wrestle with the myriad of events that will shape our thinking.

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 $18.65.

The Company has a market capitalization of $6.39 billion, with 342.75 million shares outstanding, a 52 week trading range of $7.12 to $21.89 with an average volume of 5-6 million shares traded, although spikes in trading have seen 14 million shares change hands.

Have a good one.

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The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:

On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09.

On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days.

Accumulated Profits from Investing $1000 in each OPTIONTRADE signal 14 May 2010.jpg

Recently our premium options trading service OPTIONTRADER has been putting in a great performance, the last 16 trades with an average gain of 42.73% per trade, in an average of just under 38 days per trade. Click here to sign up or find out more. have been rather fortunate to close both the $15.00 and the $16.00 options trade on Silver Wheaton Corporation, with both returning a little over 100% profit.

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