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Silver Wheaton Corporation Call Options Up between 76% and 102%

By Bob Kirtley

SLW Chart 18 October 2010.JPG

Just a quick note to update you on our position regarding the purchase of Silver Wheaton Corporation (SLW) Call Options which we acquired on the 8th September 2010, covered in our post entitled Silver Prices: Dare to Dream.

So, on the 8th September we took the plunge and acquired a spread of Call Options on our favourite stock, SLW, with the following purchases.

December 2010 $26.00 Calls @ $1.55, now at $3.10 for a gain of 98.26%
December 2010 $30.00 Calls @ $0.58, now at $1.42 for a gain of 102.37%
December 2010 $35.00 Calls @ $0.18, now at $0.34 for a gain of 76.41%
January 2011 $26.00 Calls @ $2.00, now at $3.47 for a gain of 76.30%
January 2011 $27.00 Calls @ $1.64, now at $3.05 for a gain of 84.44%.

The ‘fall’ season is now in full swing with both silver and gold prices setting the pace with gold prices climbing to record highs and standing at around $1368.26/oz, and silver prices standing at $24.32/oz.

We have also said in the past that silver prices will outperform gold prices before this bull market ends and in terms of percentage gains if we look at the charts we have compiled recently we can see that over the short term this is starting to happen.

You may recall that we revamped our strategy recently by reducing our holdings in some of our gold and silver producers in order to buy more of SLW stock and have some cash available for options trades as we identify them. The objective being to boost our financial position as we have been doing with this stock, with gains of 103%, 106% and more recently 79%.

We also acquired more SLW stock on 9th August 2010, for an average cost of $19.76 per share, which appeared a tad expensive at the time, however, these shares now stand at $27.70, giving us a paper profit of 40.11% in a little over two months, which is not a bad gain for a stock with such a large market capitalization.

At the moment we are also making use of the recommendations as stated in our premium options trading service to boost our returns along with the occasional trade, like this one, being posted on this site.

Taking a quick look at the chart we can see that SLW has managed to push up through the $27.00 level which was looking like resistance for a week or two. The RSI is now below the ‘70′ level which takes a little selling pressure off the stock and allows it to follow silver prices should they move higher this week.

Finally make sure that you have positioned yourself to take advantage of what we think will be a good rally in both gold and silver prices, right up to January 2011. Dips may appear from time to and are to be expected, however, if the longs can stand their ground, the pressure will mount on the shorters causing them to cover their positions, which they appear to be doing.

Silver Wheaton Corporation trades on the New York Stock Exchange and the Toronto Stock Exchange under the symbol of SLW.

The Company has a market capitalization of $9.53 billion, with 344.00 million shares outstanding, a 52 week trading range of $11.86 to $28.39 with an average volume of 6-7 million shares traded, although spikes in trading have seen 14 million shares change hands.

Back to our latest venture, which was the launch of an Options trading service we are pleased to report that it is going very well, so its a big thanks to all those who have signed up for it and the supportive emails that you have sent us.

Our premium options trading service, OptionTrader, closed 5 trades last week, banking profits of 100.00%, 101.34%, 101.49%, 85.05% and 81.43%

SK Chart 17 October 2010.JPG

The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

Stay on your toes and have a good one.

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Silver Prices makes no guarantee or warranty on the accuracy or completeness of the data provided on this site. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This website represents our views and nothing more than that. Always consult your registered advisor to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this website. We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.

Disclosure: GLD, SLW