The following is from a Dec. 15th post:
“For a speculative silver bull option play, I am buying: ZSL Put, Strike 10, Expiry May 2012, Currently 1.10…may even go lower.”
Hopefully you bought the 1.10, or even a good deal lower. Now at $1.35, I am pairing off half.
Note, the paper market is extremely volatile and the swing game is largely a difficult function of anticipating manipulation.
Lots of volatility on an Expiration day for Options. When Options Expiration comes around, my policy is to take 1/3 of the position off the table the day before Expiration. And then take a third off on Expiration day, then run a stop and reassess.
Relationship between Strike Price & Call Option Price
For call options, the higher the strike price, the cheaper the option. The following table lists option premiums typical for near term call options at various strike prices when the underlying stock is trading at $50
If you’ve got the chops (and stomach) for it, here is an ingenuous way to play the rise in silver…
Of the many ways to play the rise in silver, the safest remains buying pure physical silver coins/bars. However, that still isn’t the absolute most cost-efficient way, as explained in my other article, Why I’m Buying Puts on GLD – And Why You Should Too. Another variation of this strategy is buying put options on ZSL .
via Why Silver Bugs Should Stock Up on ZSL Puts – Seeking Alpha
Phil explains options expiry ‘pin risk’.
SSB: Nice explanation from YouTube Rawdoglet on Options (different from shorts).
SSB Notes: Consider the source – Bloomberg. Beyond that, does Blythe have a twin?
A trader’s almost $1 million bet that an exchange-traded fund tracking silver will decline by July was today’s biggest single options trade on U.S. exchanges as futures on the metal reached a 31-year high.
via Silver Options Trader Bets $1 Million on Price Drop by July – Bloomberg.
…levels are now reasonably stout support that may not get violated. Throw in some WTI at $110 and ole Turd is itching to buy some May silver calls…the May silver train may be about to leave the station. IF the pattern from February repeats, we could see $45 silver by the 21st or 24th of this month.
