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Lower volatility seen for silver fund

Chris McKhann (chris.mckhann@optionmonster.com)

Silver is bouncing along with gold today, but the big trade in the iShares Silver Trust is looking for lower volatility in coming months.

A single print for 30,750 May 27 puts traded for $1 in volume far above the previous open interest of 467 contracts, so it is a new position. The puts appear to have been bought at the ask price on a penny-wide spread, according to optionMONSTER systems.

Just after the puts traded, a block of 1,257,750 SLV shares changed hands for $27.70. That was $0.10 less than the prints immediately before and after, showing that the shares were sold. So it seems that this is a delta-neutral strategy looking for less volatility ahead. (See our Education section)

The SLV is up 0.76 percent to $27.80 this afternoon after falling every day for the last week, coming down from $31 since the start of this month. Shares are at their lowest levels since August.

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