Strategy targets volatility in silver fund

optionMONSTER

A day after iShares Silver Trust hit a three-year low, one trader is focused on volatility.

optionMONSTER systems show that a trader sold 10,550 September 17 puts for the bid price of $0.51. Open interest in the strike was just 741 contracts before the trade appeared, so this is a new position.

Just over a minute later, the 242,650 SLV shares traded for $19.20. The combination of stock and options creates a delta-neutral trade that is based on implied volatility , not the stock's direction. (See our Education section)

The SLV is up 1.24 percent to $19.20. Shares were above $30 in mid-February.

The volatility is up to 44 percent, up from last week's levels around 30 percent but below those from April.

More than 77,000 SLV options have changed hands already today, matching its full-session average in the last month.


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