Calls riding uptrend in Silver Wheaton
Precious metals have been rebounding in recent weeks, and traders are apparently looking for the bullish momentum to continue in Silver Wheaton through its next quarterly results.
optionMONSTER's Heat Seeker tracking program detected the purchase of more than 8,200 March 16 calls for $0.10 to $0.21 yesterday. Volume well surpassed the strike's open interest of 1,200 contracts, an indication that new money was put to work.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Coaching section)
SLW rose 8.49 percent to $12.78 yesterday but is down 13 percent in the last three months. The silver broker is scheduled to report earnings after the close on March 16, two days before yesterday's long calls expire.
Overall option volume in the name was 3 times greater than average yesterday. Calls outnumbered puts by a bullish 7-to-1 ratio.
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