Monday, August 15, 2011

SLV - married put

As I had written during the weekend, I am very bullish on silver. I expect it to be in the triple digit eventually. However, the metal could see a correction to 30 and even 28.

Currently it is trading in a nice channel with 41.5 as resistance and 36 as support.

Trade:

BTO  500 shares  = 38.4
BTO Sept 37 P = 1.39

PE: Let the stock run

If ETF crosses 40 - add a 35 Sept SP to make it a put calendar below.
If price held at 40-41 and show some short term reversal, add a near term SC - 1 or 2 strikes OTM

SE: I intend to trade this bullishly longer term. So if the price drops below 36 - roll the SP down. If it goes bearish, I will take profit on the Put when it is close to expiration and buy a lower strike longer term put while adding more shares. Alternatively, I can let the SP be assigned with shares.

I have purchased only 500 shares. I am prepared to buy more if there is a correction to around 30.

Longer term, I expect to make at least 50% in 6 months.

Update - August 17th.

SLV does not seems to move as fast I as expected.

I added a Sept 40 SC to make it a collar at 1.43






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About Me

An engineer by training graduated with B.Sc (hons) and MBA from Strathclyde university in Glasgow, Scotland. Started as an engineer in R&D for 3 years with Philips. Then, worked with DuPont for 13 years. Last job was VP, Marketing for Asia Pacific. Left to start a number of companies in various segments which include a large electronic distribution, a VoIP provider, an internet trading portal in Australia,and an executive training consultancy firm. Have listed companies in NYSE, Australia Stock Exchange, Singapore Stock Exchange Main Board. I was on the Board of Directors for 1 company listed in Thailand, 1 in Singapore and 1 in Australia. Was in the senior management of a company listed in NYSE. Still holding major share positions in the VoIP and Executive training companies. Both are private companies.

Disclaimer

These articles merely reflect the opinions of this author and are by no means a guarantee of future economic conditions, market or stock performance. Though the author strives to provide accurate and relevant data, he sometimes relies on external sources and cannot assure the reader of the accuracy of these external sources. Additionally, these articles are provided for INFORMATIONAL PURPOSES ONLY and are NOT MEANT to provide investment advice to anyone. For investment advice, please consult your professional adviser.