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Silver fund sees heavy volumes

David Russell (david.russell@optionmonster.com)

Silver gushed higher last week, and the options volumes were explosive.

optionMONSTER's tracking programs detected almost 270,000 contracts changing hands in the iShares Silver exchange-traded fund, compared with its average turnover of 75,000 in the previous month.

The April 21 calls led the activity, with investors snapping up a block of 10,000 contracts for $0.66 and total volume at the strike approaching 21,000. The March 21 calls and February 21s also traded more than 10,000 contracts.

Long calls lock in the price where the fund can be purchased, letting investors cheaply position for further gains. (See our Education section)

The SLV surged 4.61 percent to $20.65 on Friday and is up 12 percent since the beginning of the month. Precious metals have been rebounding from their lowest levels since mid-2010 and have increasingly led the gains on our researchLAB market-analysis tool.

Miners have also seen increased option activity. Barrick Gold traded almost 100,000 contracts, followed by Newmont Mining's 50,000. That was respectively quadruple and double their average amounts. Silver Wheaton and Hecla Mining were the two most active silver names, with volume triple normal levels in both.

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