Silver Wheaton Corporation Call Options Update 05 July 2010
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| Topic: Silver Mining Companies — July 5th, 2010
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.
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.
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.
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.
Silver-prices.net 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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![[Most Recent Quotes from www.kitco.com]](http://kitconet.com/images/quotes_2a.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_2.gif)
Good pick-up! Been patiently waiting on SLW for another go…and will be in the CALLS - (mimimum September) within 2 weeks - for a GOLD seasonality play.
Comment by Mark — July 5, 2010 @ 4:46 pm
You may see a slight move up in sliver, but nothing big. I will be buying put options. Silver may slide to under $13.00 an OZ. All major indicees will get hit.
Comment by Jerrold Minyard — July 5, 2010 @ 6:44 pm
Two diverse opinions, good stuff, the more the merrier!
Comment by Silver Prices — July 5, 2010 @ 9:46 pm
At a cost average of $1.12 I was wondering where you guy’s have placed your stop loss on your trade should SLW continue to sell of and you are forced to exit?
Comment by tom — July 6, 2010 @ 3:36 pm
Thats why you have to go short. SLW has to be down today. Gold has lost over $14.00 today 7/6/2010. Silver will follow. Has I wrote before all major indices will fall.(DOW,S&P,NASDAQ) This is not the time to be buying CALL$.
Comment by Jerrold Minyard — July 6, 2010 @ 6:55 pm
Tom,
We have not placed a stop loss on this trade, it doesn’t have the same liquidity as say SLV, so a flat patch would see us stopped out, its a very risky play.
Comment by Silver Prices — July 6, 2010 @ 11:49 pm
For the last 5 five days SLW is down. Watch the middle bollinger band, once it crosses down into the fifty day moving average lookout. That very bearish. Its starting to set up. On the 28 of July SLW gapped down. Its going down. Look at Hecla minning (HL) a pure silver play. Its a bellweather. It down.
Comment by Jerrold Minyard — July 7, 2010 @ 1:20 am
Jerrold,
Thanks for the comment and we take your point about the Bollinger bands, we may have to pull the pin on this one if it does not turn very soon.
The STO looks to be at the bottom and it to could give us a signal that SLW has turned.
Comment by Silver Prices — July 7, 2010 @ 5:48 am
Hey, Check out the fundamentals on ETF FAZ. This may be a killer. I bought down on FAZ, starting at$39.40 to about $10.00 and some change. I’ll ride this trend.
Comment by Jerrold Minyard — July 7, 2010 @ 6:30 am
If you haven’t placed a stop loss when do you intend to get out and protect your capital? Or are you prepared to lose all your money on this trade? Is that not more like gambling? SLW closed at 18.07 and gold/silver are looking to trade down today so they’re related stocks should follow. The Sep 21 calls are trading in the .60’s your almost 50% down. Do you intend to hold till Sep and be damed or wait till your down 90% and sell? Are you waiting on the technical’s you guy’s follow to give you a signal to go or stay? Thanks, Tom.
Comment by tom — July 7, 2010 @ 8:26 am
Have looked at SLW chart in more detail and looks like MACD has a negative divergence to price action which usually means lower prices and a triple top in place. So it doesn’t look good from a purely technical position.
Will watch for a better entry position.
Comment by Mark — July 7, 2010 @ 4:57 pm
Yes, mark. The MACD line(black line) has move far away from the signal line(red line). Check the histogram bars in the in the macd. The question is: Will we have a rally in the metals this summer?????
Comment by Jerrold Minyard — July 7, 2010 @ 7:06 pm
There is a right shoulder forming on the DOW JONES ind. Bearish.
Comment by Jerrold Minyard — July 7, 2010 @ 7:25 pm
That’s the million dollar question jerrold…will we have a golden/silver summer? looking at macro economic issues, we are not out of the woods yet with all the debt/deficit issues - which I take as a bullish point for gold/silver…however, technically the charts are not looking the best. Time will tell.
Comment by Mark — July 7, 2010 @ 8:04 pm
Team,
A better day today as SLW put on 4.33% or 79 cents on the back of a silver prices closing at $18.03, so still sweating.
Comment by Silver Prices — July 7, 2010 @ 9:29 pm
I see that SLW hit the bottom of the bollinger band. HL(hecla) did the samething. FAZ went down just as these silver plays went up today. The fundamentals on silver are still bearish, and I feel the same about the financials. So, Mark. I’ll stay bearish, and raise you 3x. Once the right shoulder is complete on Dow Jones Industrial average, look out below. Words from Gerald Celente:”2010 crash”. Every major indice, commodities, tech, etc, will move down. This will move the herd into the bond market, and the dollar will move up.
Comment by Jerrold Minyard — July 7, 2010 @ 11:38 pm
The USD is falling out of bed, next stop will be the ‘80′ level, onwards and downwards for the USD, it is dead in the water.
Comment by Silver Prices — July 8, 2010 @ 5:40 am
It may go to 80.00 on the index(dollar index), but you will see parity with the EURO. 80.00 on the dollar index maybe support, before the crash. The market will crash. You may see the dollar index top out around, or above 90.00 on the dollar index. Parity on the dollar index and the EURO is 110.00. The reason for the rise in the dollar will be the crash in the stockmarket. The herd will run to bonds. This will push the dollar up. Then, you will see the dollar devalued and a banking holiday.
Comment by Jerrold Minyard — July 8, 2010 @ 7:19 am
What do you think??????? Right now bond sales are low or have a history of being low.
Comment by Jerrold Minyard — July 8, 2010 @ 7:24 am
I think the dollar will be fine for at least ten years but will go up and down. Gold and silver are doing their seasonal sell off. The stock market may fall further but they won’t let it fall to far before pumping more free money into the system.
Comment by tom — July 8, 2010 @ 9:47 am
Tom start doing your research.
Comment by Jerrold Minyard — July 8, 2010 @ 5:58 pm
Nothing pwersonal
Comment by Jerrold Minyard — July 8, 2010 @ 6:09 pm
jerrold agree US$ parity with EURO and also if the market tanks it will be a re-run of what happened in 09 with a run to the US$…it wouldn’t surprise me. I’m just looking to scratch out a living doing short term trades and options is one way to do that…am also aware of the triple leverage etfs such as FAZ. It’s always good to be aware of what’s coming at all of us. Thanks for your opinion it may well prove to be true.
Comment by Mark — July 8, 2010 @ 9:00 pm
In the meantime I’ll continue to place trades with a pre-set risk management level that I’m comfortable with - in the event of a sudden doomsday scenario playing out.
Cheers
Comment by Mark — July 8, 2010 @ 9:12 pm
What research do you suggest I need to do?
Comment by tom — July 8, 2010 @ 10:16 pm
Got you Mark. Well Tom, You can start with Goldseek.com, and there is Goldseekradio.com. Read the internationalforecaster.com Bob Chatman is the author. Checkout Kito.com, and there is 24hgold.com. Go to chart school at stockcharts.com.
Comment by Jerrold Minyard — July 9, 2010 @ 7:16 am
Team,
We put this list together sometime a go, its a bit dated now but you might find it of some use:
http://www.gold-prices.biz/useful-websites/
We ought to update it, but there are never enough hours in the day.
Comment by Silver Prices — July 9, 2010 @ 9:31 pm
Team,
If you take a glance at the chart of SLW you will see that the STO has just turned upwards, which we see as a positive for the stock, still sweating though!
Comment by Silver Prices — July 9, 2010 @ 9:49 pm
I thought it was Kitco? What makes you think I don’t know my gold and silver? You are not the only bug are you? I know the history. I’ve read it. I know all fiat currency eventually goes to zero however I am also aware that Howard Buffet warned his son about the dollar and told his son about the power of gold back in the thirties. What does Warren think of gold ? ”Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” By the way your list missed a few important one’s in my book Goldsilver.com, 321gold.com, goldmoney.com, dollarcollapse.com ETC..ETC..
Comment by tom — July 9, 2010 @ 11:19 pm
Well, Tom. You acted as thou you had no knowledge. I told you nothing personal. Kitco was miss spelled. So, what are you trying to get at????? You should not be on here with bad posture, Tom. So what is Warren saying about gold. I hear his not that bullish on the metal, but you know he owns some. Yes, I am a where of the other sights. Tom, I’m the biggest goldbug, that you will ever come across. LOL!!!!!!!!!!!! Have a good day!
Comment by Jerrold Minyard — July 10, 2010 @ 12:04 pm
Stick to the game, and don’t make this personal. TOM!
Comment by Jerrold Minyard — July 10, 2010 @ 12:05 pm
Silver price gotta take a nap. Will discuss gold websight, and trend later today. Tom will have it together to.
Comment by Jerrold Minyard — July 10, 2010 @ 12:07 pm
If we put our heads together this could be great. 10:4
Comment by Jerrold Minyard — July 10, 2010 @ 12:08 pm
Sorry people. Recently got stopped out of some puts I had on SLW and then got stopped out on some calls. My timings be off as of late and we’ve just had a baby so my Zombie de-meaner is not doing me any favour’s. Will focus.
Comment by tom — July 10, 2010 @ 12:49 pm
Talk to me Tom. Got to go for a four mile walk. We are going to do this.
Comment by Jerrold Minyard — July 10, 2010 @ 4:23 pm
Congatulations Tom! A little bundle of fun, worth more than all the silver in the world - get stuck in and enjoy the new member of your team.
Comment by Silver Prices — July 10, 2010 @ 10:08 pm
SLW(silver wheat). last week, SLW closed below the fifty, and bounced off the bottom of the bollinger band. To me it has started to form a bearish pattern. I feel $5.40 on SLW will be resistance before it starts back down. HL(hecla minning): The Fifty day moving average has just crossed below the 200 day moving average. This is a bearish move on silver with HL being a bell weather stock for silver. To go short and stay in the game there is a ETF by the symbbol ZSL is a silver short and will not kick you out or expire. I think its a 3x your money. If not let me know.
Comment by Jerrold Minyard — July 11, 2010 @ 3:21 am
ZSL(silver short) has been playing above the 20 day moving average on the middle of the bollinger band, and the 50 day moving average for the last week. This is a bullish sign for the shorts on silver. In three to six months it will be near or have crossed the 200 day moving average. Thats a golden cross. Very bullish. We are headed for hard times, but with the right moves, and smart observation of technical analysis we could make out like fat rats.
Comment by Jerrold Minyard — July 11, 2010 @ 3:31 am
Funnily enough in the Sunday Times this week theirs an article about Warren Buffet giving a book to his friends. It’s title ‘How money dies’: the nightmare of the Weimar collapse, by Adam Fergusson. I know he sold his silver apparently but he must still hold his gold?
Comment by tom — July 11, 2010 @ 9:37 pm
He’s gotta have a volt somewhere, and I bet he didn’t sell his silver. He would like for the average Joe to think so. You gotta know that Warren is connected. He’s an elitest, and just like the cental bankers. They don’t want you to know about gold etc.
Comment by Jerrold Minyard — July 12, 2010 @ 12:26 am