How trader is digging into silver ETF

optionMONSTER

The iShares Silver Fund has been falling for a month, but a large option trade is looking for a rebound.

Heading into the last hour of the session, a trader bought 5,000 July 38 calls for $0.73 and sold 5,000 July 22 puts for the bid price of $0.49, according to optionMONSTER's systems. The volume was multiples of the open interest at each strike, so this was a new combination trade.

The position cost $0.24 to open, which will be lost at expiration if the SLV remains between $22 and $38. The top end of that range is the fund's highest level since September 2011, while the low end was last seen a before that. If the stock is below $22, the trader faces the requirement to buy the shares. (See our Education section)

The SLV finished the day at $30.17. The exchange-traded fund was up 0.73 percent on the day but barely put a dent in its losses from Friday. Shares were up at resistance at $34 a month ago.

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