The Accumulator Trade 2 Update 06 April 2011

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 $2.40 and $1.21 respectively, so we are just about evens at the moment.

Taking a quick look at the chart we can see that SLW is on the verge of a new all time high as both gold prices, which hit a high of $1456.90/oz today and silver prices which hit a high of $39.28/oz pushed SLW up by 4.17%. The RSI is sitting at 63.87 so there is still room to go through the '70' level and beyond.

Should SLW breakout in the next day or so we could be in for terrific rally which would give this second trade in 'The Accumulator' a real boost.

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Over in the Options pit, our model portfolio has managed an average return of 41.23% per trade, 68 closed trades, 66 closed at a profit, or a 97% success rate. Average trade open for 42.76 days.




The above progress chart shows our performance when profits are re-invested, 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.

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.


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Comments

[GD]

Dear sir ,
Good day
double top formation can lead to correction.
best regards

[Silver Prices]

GD,

Looks more like a triple top to us and if silver can keep going this stock will be dragged higher, ready or not!

[Greek Fire]

I've sold my positions today...

SLW (and most miners) just can't keep up with the silver price, for whatever reason. And although I think silver will continue higher, there may be a swift, quick correction after hitting over $40 soon, before resuming higher.

I think I will only go with SLV until I see the miners reacting better to spot price.

[Greek Fire]

Gah... if I sold now, my profit would've been double. Oh well, I guess for the past 2 weeks seeing SLW underperform silver price scared me this morning. When I saw SLW drop towards parity of SLV this morning I pulled the sell trigger.

On any pullback I may re-enter...

However, I still see SLW is up about half as much as the other miners. Why is this? Perhaps people see more value with the others...?

EXK is soaring the past few weeks, for example... along with many others. Maybe it's time to find a new "silver stock in the rough"?

p.s. - Anyone who hasn't signed up with SK options trading should... it's done well for me since I signed up last summer.

There, some testamonial endorsement :)

[Silver Prices]

Thanks for you kind words of endorsement, long may it continue to serve you.

[Silver Prices]

Also, 92% on First Majestic in 2 months wasn't too bad a call.

As for EXK we do have a lot of their stock, however we may buy more in the future.