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Long-term bull likes Silver Wheaton

Chris McKhann (chris.mckhann@optionmonster.com)

A long-term call spread led Friday's option activity in Silver Wheaton as the stock struggles to rebound.

optionMONSTER systems show that 30,217 SLW options traded, compared to the daily average of 12,397. The volume was topped by a January 2015 call spread.

A trader bought 5,000 of the 33 calls for the ask price of $1.93 and sold 10,000 of the 45 calls for the bid price of $0.85. Volume was multiples of the previous open interest at each strike, indicating new positioning.

The trade, known as a ratio spread because twice as many calls were sold than bought, cost $0.23 to open. That is the maximum amount at risk, while the maximum gain would come with shares at $45 upon expiration in 1-1/2 years. (See our Education section)

SLW was down 1.73 percent to $20.47 on Friday after hitting a low of $17.75 two weeks ago. Shares of the silver broker were above $40 going into November and were last above $45 at their 2011 highs. 

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