SLV Puts Rally On Volatility; Testing Trend Line, 20DMA (SLV, VXSLV Charts)

SLV (StockCharts.com)
Silver continued its sell off on Monday and $SLV puts were loving the volatility. On April 25, 2011, a SLV October $41-$33 put spread caught my eye that traded 10,000 contracts on each strike. I'm not sure if it was a backspread or vertical debit spread, but a debit spread made sense as a six month hedge or trade imo.

From the snapshot of the option chain: 10,000 October $41 puts last traded at $3.00 and 10,000 October $33 puts last traded at $1.05. If it was a debit spread, the trader paid $1.95 to put on the trade. With decent timing, SLV volatility spiked on a sell off and the SLV Oct $41 put closed at $4.45 today. Not bad! SLV closed at $42.83. On another note, remember 100,000 July $25 puts traded a few weeks ago? Interesting trade.

The ETF is testing an important trend line and the 20 day moving average. If you look at the weekly chart there is a 2-year ascending channel that could catch SLV if it breaks down. Spot silver is currently trading at $44.83. See a live 24 hour chart of silver spot here. Check out SLV and VXSLV charts after the jump.


SLV 6-Month chart (stockcharts.com)


SLV 1-year chart (stockcharts.com)


SLV 5-year chart (stockcharts.com)


VXSLV (CBOE Silver ETF Volatility Index (futuresource.com)

Comments

  1. An update on that trade 5/4/2011:

    SLV closed at $38.27
    Oct SLV $41 Put closed at $6.35
    Oct SLV $33 Put closed at $2.26

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  2. WOW!

    SLV at $33.52
    Oct SLV $41 Put at $9.20 (from $3.00)
    Oct SLV $33 Put closed at $3.95 (from $1.05)

    ReplyDelete

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