Rolling down my Dec. 13 calls to 12 calls and covering gold shorts and adding silver shorts, just taking advantage of the ratio coming down over the last few days. Also adding to the overall position here via more Dec. 12 calls against more silver shorts. A lot of shareholders selling shares back to the company today, so the float is declining again and the 13F filings showed that Dalio has doubled his stake in the last quarter to just under 700k shares. Should be noted that he increased his position in miners and metals across the board as you have to buy what is cheap and sell what is not. He reduced positions further in tech and increased in metals as that is where the long term opportunity lies, should the world economies ever grow again, commodities will be the source of the bulk of future returns. RBC gold conference is today, but there is no live link. All the major producers are presenting. Industry wide cost cutting has reduced the level of profitable production, so they are increasing production in this environment which is increasing supply and helping to drive down prices. There is always a shoot yourself in the foot type of reaction when you cost cut in the short run. Streamers have also helped to drive down costs as they have kept mines operating that otherwise may have reduced production had they not found a cheap source of operating capital. Gold is profitable now over $700 and Silver is 70% a by-product, so less sensitive to price as far as mining goes. The price of gold, copper and iron ore are what drives the supply side of silver. With physical demand down and supply increasing, there is room on the downside, which is what the miners are trying to price discover. I think the miners are pricing in that $700-800 level in gold and subsequently that $9-$10 area in silver. So still safe to remain short the metals and hedge with mining calls. SLW being most sensitive as it is the most leveraged to the upside.
Most likely, Silver still has a ways to go I believe. The AISC of the top miners keeps dropping due to cost cutting, which should effectively allow for another 20-30% decline in Gold and Silver. I think the bigger thing to watch is copper. Rio-Tinto just said they were going to keep increasing production to maintain market share which will keep the market in surplus and keep silver pumping out in surplus as well. Producers can now easily handle $12 Silver and $700-$800 gold without cutting production. Stay short the metals into 2016. SLW calls are still the cheapest way to hedge off a leveraged short silver and gold futures position.
Sold a 1/4 at 13.00 and covered the silver at 14.93 (cost), should stay volatile for a bit. Would like to retest and buy back. Taking the quick $1000 per contract profit here to lower basis. Should get some more trades here soon
enormous discount here thanks to RGLD. Hang tight and enjoy the ride for a few days, snapping up lots of SLW and selling lots of silver. 12.75 vs 14.93 so far, going to be a big trade
Read the deal, it is published on their website. You can also listen to the conference call.
Because SLW is Silver at $9 an oz. I can sell silver futures at $15 an oz.
No dilution, deal paid for with cash on hand and their revolving line of credit.
They repurchased 700k shares as well, so the number of shares has shrunk Q over Q.
Buying back all SLW here at 13.55 from this mornings ramp and shorting 15.08 Silver. Paid out a full dollar per contract this morning and then went back to full discount from yesterdays close. Great day for SLW longs and silver shorts
SLW is increasing production at a nice clip and the Glencore stream will increase the dividend in the 4th Quarter and beyond with Silver prices anywhere near $15. No dilution on this deal and SLW even purchased some 700k shares (roughly) under $12 and were aggressive. I believe they use the remainder of the allotment to provide bid support until the discount is removed, but we are still discounted $6 at minimum and this doesn't include any value being attributed to exploration and discovery or higher prices in the next 20 years. They also discussed a letter of credit in lieu of cash to be posted for the CRA, not sure if this will fly but it would be great news while they defend their position.
Will be backing up the truck on any and every dip and picking up calls to increase leverage as long as we remain discounted to the stream and discounted heavily to their peers. Like I said, the discount at this point is massive and would take an open north of $20 here to actually get to fair value, and this doesn't account for any increase in production next year, which they reiterated they will be beating their previous production guidance.
Long calls, short silver
Crazy! All sorts of panic selling in the options markets end of the day, huge holes. Someone must have blown out today end of month on this thing. Hate to get bids filled like that but when a .40 delta option drops like its $1 ITM it's usually someone blowing out as they sold 50% under fair value. The volume is avg. but it is obviously just churn because the lack of liquidity is evident when things get this out of whack. While I like the swings, the company must be getting #$%$ at the complete loss of a solid shareholder base.
buying back yesterday position, came in 50c a contract this morning and now time to reload. The Nov. 14 calls dropped more than the stock today, so super cheap here against short silver at 15.51. This one should pay out even higher on Monday when the discount comes out. Great month for SLW in October and the shorts keep driving big discounts for trades. Hopefully the interest stays high and we get a lot more swings like this in November. Have a great weekend all
Buying some SLW at 13.69 via Nov. 13.50 calls and shorting silver at 15.57. Huge discount here today. 50c a contract discount here which will be removed as usual by tomorrow.
The stock can see this coming a ways in advance. This is a very widely held company and everyone is looking to lower their stake. You can feel the lack of excitement over their products in the last couple of years and it is getting worse. The technology is becoming commoditized and will keep eating at margins. I would sell every rally if I had any position in this company. I personally don't own any stock and could care less, but every company eventually declines and I believe this company is in it's initial phase of decline. That doesn't mean the company won't make a lot of money in the years to come, but the shareholders will not see a return much greater than the dividend and market return in general. Good luck, but this company is no longer exciting and their future product lines seems more desperate than revolutionary. I know people will point to the unit numbers and the rest of the wall street jargon that Steve jobs would have hated, but just ask yourself the simple question, " Do I really get excited about the next "I" whatever as I did 5 years ago?" Try not to lie to yourself.
Sold all the SLW over 14 here and covered 15.75 silver. They paid out today 60c a contract in 24 hrs, can't beat that. Will look to reload if they can knock SLW down hard in a bit
yes. The good news is said they would consider moving out of Canada. They only have 35 employees in a small office center, so no real need to be headquartered somewhere that is not beneficial to your business, especially when you don't do much business there.