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Large trades look for paydirt in silver

Traders are looking for silver to rebound in early this year.

Precious metals and their miners sold off in the second half of 2016 but have been holding their ground in recent days. Today our systems have detected two large bullish trades in the iShares Silver Fund:

  • 8,200 January 16.50 calls were purchased for $0.07 to $0.11 against open interest of 7.891 contracts,

  • 16,000 February 18 calls were sold for $0.07 below open interest and rolled to 8,000 February 17 calls bought for $0.17.

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 Education section)

SLV is up 3.18 percent to $15.59 in morning trading but is down 17 percent in the last three months. Overall option volume was about average in the fund so far in the session.

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