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« Silver Prices Rally Takes a Pause | Main | Silver Wheaton Corporation: Buy, Hold or Sell? »
Wednesday
Sep082010

Silver Prices: Dare to Dream

SLW Chart 09 Sep 2010.JPG


With Labour Day just behind us we are in a anticipatory mood as the 'fall' season gets under way. As we write gold prices are taking a peak at previous record highs and stand at $1255.19/oz and silver prices are at $19.91/oz which is just below its previously recent high, setting the stage for an upside breakout.

Once through these resistance levels both metals could go on a spectacular run and take many investors by surprise with the speed in which they cover new ground. Holding the metal itself is the way to go for most investors as it carries no third party risk, however, for those looking for a little leverage to the metals there are a select few associated silver producers available to fulfill your objectives. As you know one of our favorites is the Silver Wheaton Corporation (SLW) which has been our best performer both through direct investment in the stock and also through a number of successful options trades, such as the one that we closed recently for a profit of 106%.

Now, remember if you don't have dreams they cant come true, so line up a few things that are unique in terms of dreams to you and then prepare the road map of how to achieve them. We wont bore you with our dreams as they vary from the simplistic to the ridiculous. However our road map consists of holding a core position in the physical metals along with a small list of mining stocks and some cash for trading purposes. At the moment we utilize the recommendations as stated in our premium options trading service to boost our returns along with the occasional more cavalier trade being posted on our sites.

In this instance our road map involves taking a spread of Call Options on our favourite stock, SLW, with the following purchases.

December 2010 $26.00 Calls @ $1.55
December 2010 $30.00 Calls @ $0.58
December 2010 $35.00 Calls @ $0.18

and

January 2011 $26.00 Calls @ $2.00
January 2011 $27.00 Calls @ $1.64

Silver Wheaton went on to trade lower in the session so these options will be cheaper now than when we made our purchase.

Finally make sure that your ducks are all in a row and that you have positioned yourself to take advantage of what we think will be a good rally in both gold and silver prices.



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.

On Friday, 27th August 2010, we closed another successful trade banking a profit of 79.46% on Call Options on Silver Wheaton.

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, with more positions opened yesterday. Drop by and take a look.


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. (Winners of the GoldDrivers Stock Picking Competition 2007)

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.





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