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« SK OptionTrader Banks 38.66% Profit In 13 Days | Main | Endeavour Silver Corp looking for an operating profit of $24/oz »

The Accumulator Trade 2 Update 24 March 2011

slw chart 24 March 2011.JPG

On March 8th, 2011 we purchased a tranche of Call Options in Silver Wheaton Corporation (SLW) to open trade 2 of The Accumulator. They are as follows:

100 contracts, June 2011, Call Options, strike price of $50.00 for $3.05 for a cost of $30,500.00 and 100 contracts, June 2011, Call Options, strike price of $55.00 for $1.84 for a cost of $18,400.00.

On the 18th March 2011, we doubled our position with a purchase of 100 contracts respectively for $1.38 and $0.76, lowering our average cost to $2.21 and $1.33 and increasing our holding to 200 contracts in each series.

At the close of trading on the NYSE today the last trades were $2.42 and $1.31 respectively, so its nice to see these contracts heading in the right direction.

Silver prices were bubbling again, up around $1.00 to trade at $37.40/oz, as we write.

Taking a quick look at the chart above we can see that both the 50 and 200 day moving averages are moving up in support of the stock price, although the gap between the stock price and the 200dma is a tad wide in our humble opinion. However, we cant always expect to be presented with a perfect set up and so we have to make a call on what we have. SLW is also close to making another all time high which could lead to a rally to much higher ground, as once gain SLW would be in uncharted waters with little overhead resistance. Unlike silver producers who have to wrestle with rising oil prices etc, SLW has fixed costs so every dollar rise in silver prices, in effect, goes straight to the bottom line. The technical indicators are well positioned for a move to higher ground with the RSI at 64.52 and the MACD shaping up for a crossover which is usually positive for the stock price.

So, in conclusion we will hold and watch for now.

PS: Today over at we have just closed another winning trade in the options market.

Our model portfolio is up 138.05% since inception, Average return of 41.27% per trade, 68 closed trades, 66 closed at a profit, or a 97% success rate. Average trade open for 43.21 days.

A gentle reminder for those of you who are still thinking about it, prices will double as of 2nd April 2011, but will remain as is for existing subscribers, join us now while this bargain lasts.

SK model portfolio 14 March 2011.JPG

The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.

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.

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)

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